Finance Act 2013

• (b) it is necessary to determine under a provision of this Schedule, or a provision inserted by Part 3 of this Schedule, whether a tax year before the tax year 2013-14 (a “pre-commencement tax year”) was a split year as respects the individual.

• (2) The provision is to have effect as if—

• (a) the reference to a split year were to a tax year to which the relevant ESC applied, and

• (b) any reference to the UK part or the overseas part of such a year were to the part corresponding as far as possible, in accordance with the terms of the relevant ESC, to the UK part or the overseas part of a split year.

• (3) Where the provision also refers to cases involving actual or deemed departure from the UK, the reference is to be read and given effect so far as possible in accordance with the terms of the relevant ESC.

• (4) “The relevant ESC” means whichever of the extra-statutory concessions to which effect is given by Part 3 of this Schedule is relevant in the individual's case.

156

• (1) Sub-paragraph (2) applies in determining whether the test in paragraph 50(3) is met where the relevant year is the tax year 2013-14.

• (2) The circumstances of a partner of the taxpayer are to be treated as falling within Case 6 for the previous tax year if the partner was eligible for split year treatment in relation to that tax year under the relevant ESC on the grounds that he or she returned to the United Kingdom after a period working overseas full-time.

• (3) Where the circumstances of a partner are treated as falling within Case 6 under sub-paragraph (2), the reference in paragraph 50(7)(b) to the UK part of the relevant year as defined for Case 6 is a reference to the part corresponding, so far as possible, in accordance with the terms of the relevant ESC, to the UK part of that year.

• (4) “The relevant ESC” means whichever of the extra-statutory concessions to which effect is given by Part 3 of this Schedule is relevant in the partner's case.

157

• (1) This paragraph applies in determining whether the test in paragraph 110(1)(c) is met in relation to a tax year before the tax year 2013-14 (a “pre-commencement tax year”).

• (2) Paragraph 110(1) is to have effect as if for paragraph (c) there were substituted—

(c) at least 4 out of the 7 tax years immediately preceding the year of departure was a tax year meeting the following conditions— (i) the individual was resident in the UK for that year, and (ii) there was no time in that year when the individual was Treaty non-resident (see paragraph 112(3)).

• (3) Whether an individual was resident in the UK for a pre-commencement tax year is to be determined in accordance with the rules in force for determining an individual's residence for that pre-commencement tax year (and not in accordance with the statutory residence test).

158

• (1) The existing temporary non-resident provisions, as in force immediately before the day on which this Act is passed, continue to have effect on and after that day in any case where the year of departure (as defined in Part 4 of this Schedule) is a tax year before the tax year 2013-14.

• (2) Where those provisions continue to have effect by virtue of sub-paragraph (1)—

• (a) the question of whether a person is or is not resident in the UK for the tax year 2013-14 or a subsequent tax year is to be determined for the purposes of those provisions in accordance with Part 1 of this Schedule, but

• (b) the effect of Part 3 is to be ignored.

• (3) The existing temporary non-resident provisions are—

• (a) section 10A of TCGA 1992 (chargeable gains),

• (b) section 576A of ITEPA 2003 (income withdrawals under certain foreign pensions),

• (c) section 579CA of that Act (income withdrawals under registered pension schemes), and

• (d) section 832A of ITTOIA (relevant foreign income charged on remittance basis).

159

Section 13 of FA 2012 (Champions League final 2013) is to be read and given effect, on and after the day on which this Act is passed, as if section 218 and this Schedule had not been enacted.

SCHEDULE 46

PART 1 — Income tax and capital gains tax: remittance basis of taxation

Remittance basis restricted to non-doms

1

Chapter A1 of Part 14 of ITA 2007 (remittance basis) is amended as follows.

2

In section 809A (overview of Chapter), omit “or are not ordinarily UK resident”.

3

In section 809B (claim for remittance basis to apply)—

• (a) in subsection (1)(b), omit “or is not ordinarily UK resident in that year”, and

• (b) omit subsection (2).

4

In section 809D (application of remittance basis without claim where unremitted foreign income and gains under £2,000)—

• (a) in subsection (1)(b), omit “or is not ordinarily UK resident in that year”, and

• (b) in subsection (1A), omit “the individual is not domiciled in the United Kingdom in that year and”.

5

In section 809E (application of remittance basis without claim: other cases), in subsection (1)(b), omit “or is not ordinarily UK resident in that year”.

Treatment of relevant foreign earnings

6

ITEPA 2003 is amended as follows.

7

• (1) In section 22 (chargeable overseas earnings for year when remittance basis applies and employee ordinarily UK resident), in subsection (1), for paragraph (b) substitute—

(b) the employee does not meet the requirement of section 26A for that year.

• (2) Accordingly—

• (a) in the heading of that section, for “ordinarily UK resident” substitute “ outside section 26 ”, and

• (b) in the italicised heading before that section, for “UK ordinarily resident employees” substitute “ employees outside section 26 ”.

8

In section 23 (calculation of “chargeable overseas earnings”), in subsection (2), for paragraph (aa) substitute—

(aa) the employee does not meet the requirement of section 26A for that year,

.

9

• (1) In section 26 (foreign earnings for year when remittance basis applies and employee not ordinarily UK resident), in subsection (1), for “is not ordinarily UK resident in” substitute “ meets the requirement of section 26A for ”.

• (2) Accordingly—

• (a) in the heading of that section, for “not ordinarily UK resident” substitute “ meets section 26A requirement ”, and

• (b) in the italicised heading before that section, for “not UK ordinarily resident” substitute “ who meet section 26A requirement ”.

10

After that section insert—

(26A) (1) An employee meets the requirement of this section for a tax year if the employee was— (a) non-UK resident for the previous 3 tax years, or (b) UK resident for the previous tax year but non-UK resident for the 3 tax years before that, or (c) UK resident for the previous 2 tax years but non-UK resident for the 3 tax years before that, or (d) non-UK resident for the previous tax year, UK resident for the tax year before that and non-UK resident for the 3 tax years before that. (2) The residence status of the employee before the 3 years of non-UK residence is not relevant for these purposes.

11

• (1) Section 41C (foreign securities income) is amended as follows.

• (2) In subsection (4), for paragraph (b) substitute—

(b) the individual does not meet the requirement of section 26A for the year (reading references there to the employee as references to the individual),

.

• (3) In subsection (6), for paragraph (b) substitute—

(b) the individual meets the requirement of section 26A for the year (reading references there to the employee as references to the individual), and

.

12

In section 271 (limited exemption of removal benefits and expenses: general), in subsection (2)—

• (a) in paragraph (a), for “ordinarily UK resident” substitute “ outside section 26 ”, and

• (b) in paragraph (b), for “not ordinarily UK resident” substitute “ meets section 26A requirement ”.

13

• (1) In section 554Z9 (remittance basis: A is ordinarily UK resident), in subsection (1), for paragraph (c) substitute—

(c) A does not meet the requirement of section 26A for the relevant tax year (reading references there to the employee as references to A),

.

• (2) Accordingly, in the heading of that section, for “A is ordinarily UK resident” substitute “ A does not meet section 26A requirement ”.

14

• (1) In section 554Z10 (remittance basis: A is not ordinarily resident), in subsection (1), for paragraph (c) substitute—

(c) A meets the requirement of section 26A for the relevant tax year (reading references there to the employee as references to A).

• (2) Accordingly, in the heading of that section, for “A is not ordinarily resident” substitute “ A meets section 26A requirement ”.

15

• (1) Section 690 (employee non-resident etc) is amended as follows.

• (2) In subsection (1), for paragraph (a) substitute—

(a) is either non-UK resident for the tax year or is UK resident but meets the requirement of section 26A for the tax year, and

.

• (3) In subsection (2A), for “but not ordinarily resident in a tax year” substitute “ for a tax year but not domiciled in the United Kingdom in that tax year ”.

Consequential amendments

16

In section 266A of ICTA (life assurance premiums paid by employer), in subsection (8)—

• (a) in paragraph (a), for “employee resident and ordinarily resident, but not domiciled, in UK” substitute “ remittance basis applies and employee outside section 26 ”, and

• (b) in paragraph (b), for “employee resident, but not ordinarily resident, in UK” substitute “ remittance basis applies and employee meets section 26A requirement ”.

17

In section 12 of TCGA 1992 (non-UK domiciled individuals to whom remittance basis applies), for subsection (1) substitute—

(1) This section applies to foreign chargeable gains accruing to an individual in a tax year (“the foreign chargeable gains”) if section 809B, 809D or 809E of ITA 2007 (remittance basis) applies to the individual for that year.

18

In section 87B of that Act (section 87: remittance basis), in subsection (1)—

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

• (b) omit “and” at the end of paragraph (b), and

• (c) omit paragraph (c).

19

In section 726 of ITA 2007 (non-UK domiciled individuals to whom remittance basis applies), for subsection (1) substitute—

(1) This section applies in relation to income treated under section 721 as arising to an individual in a tax year (“the deemed income”) if section 809B, 809D or 809E (remittance basis) applies to the individual for that year.

20

In section 730 of that Act (non-UK domiciled individuals to whom remittance basis applies), for subsection (1) substitute—

(1) This section applies in relation to income treated under section 728 as arising to an individual in a tax year (“the deemed income”) if section 809B, 809D or 809E (remittance basis) applies to the individual for that year.

21

In section 735 of that Act (non-UK domiciled individuals to whom remittance basis applies), for subsection (1) substitute—

(1) This section applies in relation to income treated under section 732 as arising to an individual in a tax year (“the deemed income”) if section 809B, 809D or 809E (remittance basis) applies to the individual for that year.

22

In section 809F of that Act (effect on what is chargeable), in subsection (4), for “If the individual is not domiciled in the United Kingdom in that year, the” substitute “ The ”.

23

In section 809YD of that Act (chargeable gains accruing on sales of exempt property), in subsection (3), omit “and P is not domiciled in the United Kingdom in that year”.

24

In section 809Z7 of that Act (meaning of “foreign income and gains” etc)—

• (a) in subsection (2)(d), omit “if the individual is not domiciled in the United Kingdom in that year,”, and

• (b) in subsection (3)(a), for “is ordinarily UK resident in” substitute “ does not meet the requirement of section 26A of ITEPA 2003 for ”.

Commencement

25

The amendments made by this Part of this Schedule have effect in relation to an individual's foreign income and gains for the tax year 2013-14 or any subsequent tax year.

Savings

26

• (1) This paragraph applies to an individual who—

• (a) was resident in the United Kingdom for the tax year 2012-13, but

• (b) was not ordinarily resident there at the end of the tax year 2012-13.

• (2) Enactments relating to income tax or capital gains tax have effect, in relation to any eligible foreign income and gains of the individual, as if the amendments made by this Part of this Schedule had not been made.

• (3) “Eligible foreign income and gains” means—

• (a) if the individual was resident in the United Kingdom for the tax year 2010-11 and the tax year 2011-12, foreign income and gains for the tax year 2013-14,

• (b) if the individual was not resident in the United Kingdom for the tax year 2010-11 but was resident in the United Kingdom for the tax year 2011-12, foreign income and gains for the tax year 2013-14 and the tax year 2014-15, and

• (c) if the individual was not resident in the United Kingdom for the tax year 2011-12, foreign income and gains for the tax year 2013-14, the tax year 2014-15 and the tax year 2015-16.

• (4) Where, by virtue of this paragraph, it is necessary to determine whether an individual is (or is not) ordinarily resident in the United Kingdom at a time on or after 6 April 2013, the question is to be determined as it would have been in the absence of this Schedule.

Interpretation

27

References in this Part of this Schedule to an individual's “foreign income and gains” for a tax year are to be read in accordance with section 809Z7 of ITA 2007 (interpretation of remittance basis rules).

PART 2 — Income tax: arising basis of taxation

ICTA

28

In section 614 of ICTA (exemptions and reliefs in respect of income from investments etc of certain pension schemes)—

• (a) in subsection (4), for “not domiciled, ordinarily resident or resident” substitute “ not domiciled and not resident ”, and

• (b) in subsection (5), for “not domiciled, ordinarily resident or resident” substitute “ not domiciled and not resident ”.

ITEPA 2003

29

ITEPA 2003 is amended as follows.

30

In section 56 (application of Income Tax Acts in relation to deemed employment), in subsection (5)—

• (a) for paragraph (a) substitute—

(a) the worker being resident or domiciled outside the United Kingdom or meeting the requirement of section 26A,

, and

• (b) in paragraph (b), omit “or ordinarily resident”.

31

In section 61G (application of Income Tax Acts in relation to deemed employment), in subsection (5)—

• (a) for paragraph (a) substitute—

(a) the worker being resident or domiciled outside the United Kingdom or meeting the requirement of section 26A,

, and

• (b) in paragraph (b), omit “or ordinarily resident”.

32

In section 328 (the income from which deductions may be made), in subsection (5), omit the entry for Chapter 6 of Part 5 and the word “and” immediately preceding it.

33

In section 341 (travel at start or finish of overseas employment), in subsection (3), for “resident and ordinarily resident in the United Kingdom” substitute “ UK resident ”.

34

In section 342 (travel between employments where duties performed abroad), in subsection (6), for “resident and ordinarily resident in the United Kingdom” substitute “ UK resident ”.

35

In section 370 (travel costs where duties performed abroad: employee's travel), in subsection (6), omit “in which the employee is ordinarily UK resident”.

36

In section 376 (foreign accommodation and subsistence costs and expenses (overseas employments)), in subsection (1)(b), for “resident and ordinarily resident in the United Kingdom” substitute “ UK resident ”.

37

• (1) Section 378 (deductions from seafarers' earnings: eligibility) is amended as follows.

• (2) In subsection (1), for “relevant taxable earnings or EEA-resident earnings” substitute “ relevant general earnings ”.

• (3) For subsection (5) substitute—

(5) Relevant general earnings” means— (a) taxable earnings under section 15, 22 or 26, or (b) general earnings— (i) to which section 27 applies, and (ii) which are for a period in which the employee is liable under the law of an EEA State (other than the United Kingdom) to tax in that State by reason of domicile or residence.

• (4) Omit subsection (6).

38

• (1) Section 413 (exception in certain cases of foreign service) is amended as follows.

• (2) In subsection (2), after “subsection” (in the second place it occurs) insert “ (2A), ”.

• (3) After that subsection insert—

(2A) This subsection applies to service in or after the tax year 2013-14— (a) to the extent that it consists of duties performed outside the United Kingdom in respect of which earnings would not be relevant earnings, or (b) if a deduction equal to the whole amount of the earnings from the employment was or would have been allowable under Chapter 6 of Part 5 (deductions from seafarers' earnings).

• (4) In subsection (3), after “2003-04” insert “ but before the tax year 2013-14 ”.

• (5) After that subsection insert—

(3ZA) In subsection (2A)(a) “relevant earnings” means earnings for a tax year that are earnings to which section 15 applies and to which that section would apply even if the employee made a claim under section 809B of ITA 2007 (claim for remittance basis) for that year.

39

• (1) In section 681A (foreign benefits of consular employees), for subsection (4) substitute—

(4) Condition C is that— (a) the officer or employee is a permanent employee of that state, or (b) the officer or employee was non-UK resident for each of the 2 tax years preceding the tax year in which the officer or employee became a consular officer or employee in the United Kingdom of that state.

• (2) The amendment made by this paragraph does not apply to a person who became a consular officer or employee in the United Kingdom before 6 April 2013.

40

• (1) In Schedule 2 (approved share incentive plans), in paragraph 8(2), omit paragraph (b) and the “and” immediately before it.

• (2) The amendments made by this paragraph do not apply to plans that have been approved before the day on which this Act is passed.

41

• (1) In Schedule 3 (approved SAYE option schemes), in paragraph 6(2)—

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

• (b) omit paragraph (ca), including the “and” at the end of it.

• (2) The amendments made by this paragraph do not apply to schemes that have been approved before the day on which this Act is passed.

42

In Schedule 5 (enterprise management incentives), in paragraph 27(3)(b), omit “and ordinarily resident”.

ITTOIA 2005

43

ITTOIA 2005 is amended as follows.

44

In section 154A (certain non-UK residents with interest on 3½% War Loan 1952 Or After), in subsection (1)(a), omit “ordinarily”.

45

In section 459 (transfer of assets abroad), in subsection (2), for “an individual ordinarily UK resident” substitute “ a UK resident individual ”.

46

In section 468 (non-UK resident trustees and foreign institutions), for subsection (2) substitute—

(2) Chapter 2 of Part 13 of ITA 2007 (which prevents avoidance of tax where a UK resident individual benefits from a transfer of assets) applies with the modifications specified in subsection (3) or (4).

47

In section 569 (anti-avoidance: transfer of assets abroad), in subsection (2), for “an individual ordinarily UK resident” substitute “ a UK resident individual ”.

48

• (1) In section 636 (calculation of undistributed income), in subsection (2)(b), for “, resident and ordinarily resident” substitute “ and resident ”.

• (2) The amendment made by this paragraph does not apply in calculating income arising under a settlement in tax years ending before 6 April 2013.

49

In section 648 (income arising under a settlement), in subsection (1)(b), for “, resident and ordinarily resident” substitute “ and resident ”.

50

In section 651 (meaning of “UK estate” and “foreign estate”), in subsection (3), omit “or not ordinarily UK resident”.

51

In section 664 (the aggregate income of the estate), in subsection (2)(b)(i), omit “who was ordinarily UK resident”.

52

• (1) Section 715 (interest from FOTRA securities held on trust) is amended as follows.

• (2) In subsection (1)(b), for “person not ordinarily UK resident” substitute “ non-UK resident person ”.

• (3) In subsection (2)—

• (a) for “person not ordinarily UK resident” substitute “ non-UK resident person ”, and

• (b) for “is ordinarily UK resident at the time when” substitute “ is UK resident for the tax year in which ”.

• (4) In relation to a FOTRA security issued before 6 April 2013, the amendments made by this paragraph apply only if the security was acquired by the trust on or after that date.

53

• (1) In section 771 (relevant foreign income of consular officers and employees), for subsection (4) substitute—

(4) Condition C is that— (a) the officer or employee is a permanent employee of that state, or (b) the officer or employee was non-UK resident for each of the 2 tax years preceding the tax year in which the officer or employee became a consular officer or employee in the United Kingdom of that state.

• (2) The amendment made by this paragraph does not apply to a person who became a consular officer or employee in the United Kingdom before 6 April 2013.

ITA 2007

54

ITA 2007 is amended as follows.

55

In section 465 (overview of Chapter 2 and interpretation), in subsection (4), omit “and ordinary residence”.

56

• (1) Section 475 (residence of trustees) is amended as follows.

• (2) For subsection (1) substitute—

(1) This section applies for income tax purposes and explains how to work out, in relation to the trustees of a settlement, whether or not the single person mentioned in section 474(1) is UK resident.

• (3) In subsection (2), for “both UK resident and ordinarily UK resident” substitute “ UK resident ”.

• (4) In subsection (3), for “both non-UK resident and not ordinarily UK resident” substitute “ non-UK resident ”.

57

• (1) Section 476 (how to work out whether settlor meets condition C) is amended as follows.

• (2) In subsection (2)(b), omit “, ordinarily UK resident”.

• (3) In subsection (3)(b), omit “, ordinarily UK resident”.

• (4) The amendment made by sub-paragraph (2) does not apply if the person died before 6 April 2013.

• (5) The amendment made by sub-paragraph (3) does not apply if the settlement was made before 6 April 2013.

58

In section 643 (non-residents), in subsection (1), omit “and is not ordinarily UK resident during that year”.

59

In section 718 (meaning of “person abroad” etc), in subsection (2)(b), for “neither UK resident nor ordinarily UK resident” substitute “ non-UK resident ”.

60

In section 720 (charge to tax on income treated as arising under section 721), in subsection (1), omit “ordinarily”.

61

• (1) Section 721 (individuals with power to enjoy income as a result of relevant transactions) is amended as follows.

• (2) In subsection (1), for “conditions A and B” substitute “ conditions A to C ”.

• (3) After subsection (3) insert—

(3A) Condition C is that the individual is UK resident for the tax year.

• (4) In subsection (5), for paragraph (b) substitute—

(b) whether the individual is UK resident for the tax year in which the relevant transfer is made (if different from the tax year mentioned in subsection (1)), or

.

62

In section 727 (charge to tax on income treated as arising under section 728), in subsection (1), omit “ordinarily”.

63

• (1) Section 728 (individuals receiving capital sums as a result of relevant transactions) is amended as follows.

• (2) In subsection (1)—

• (a) in paragraph (a), omit the “and” at the end of sub-paragraph (iii), and

• (b) at the end of paragraph (b) insert

, and (c) the individual is UK resident for the tax year.

• (3) In subsection (3), for paragraph (b) substitute—

(b) whether the individual is UK resident for the tax year in which the relevant transfer abroad is made (if different from the tax year mentioned in subsection (1)), or

.

64

In section 732 (non-transferors receiving benefit as a result of relevant transactions), in subsection (1)(b), for “ordinarily UK resident receives a benefit” substitute “ UK resident for a tax year receives a benefit in that tax year ”.

65

• (1) In section 749 (restrictions on particulars to be provided by relevant lawyers), in subsection (2), omit “ordinarily”.

• (2) The amendment made by this paragraph applies only if the transfer is made or, in the case of an associated operation, the transfer is made and the associated operation is effected on or after 6 April 2013.

66

In section 812 (case where limit on liability of non-UK residents is not to apply), in subsection (1)(a), omit “ordinarily”.

67

• (1) In section 834 (residence of personal representatives), in subsection (3), omit “, ordinarily UK resident”.

• (2) The amendment made by this paragraph does not apply if D died before 6 April 2013.

68

• (1) In section 858 (declarations of non-UK residence: individuals)—

• (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (b) in subsection (4), omit “ordinarily”.

• (2) The amendments made by this paragraph apply to the making of declarations on or after 6 April 2014, and any declarations made before that date continue to have effect in respect of interest paid on or after that date as if those amendments had not been made.

69

• (1) In section 859 (declarations of non-UK residence: Scottish partnerships)—

• (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (b) in subsection (4), omit “ordinarily”.

• (2) The amendments made by this paragraph apply to the making of declarations on or after 6 April 2014, and any declarations made before that date continue to have effect in respect of interest paid on or after that date as if those amendments had not been made.

70

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

• (2) The amendment made by this paragraph applies only if the deceased died on or after 6 April 2014.

71

• (1) Section 861 (declarations of non-UK residence: settlements) is amended as follows.

• (2) In subsection (3)(b)(i) and (iii), omit “ordinarily”.

• (3) In subsection (4)—

• (a) in paragraphs (b) and (d), omit “ordinarily”, ...

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

• (4) The amendments made by this paragraph apply to the making of declarations on or after 6 April 2014, and any declarations made before that date continue to have effect in respect of interest paid on or after that date as if those amendments had not been made.

Commencement

72

• (1) The amendments made by this Part of this Schedule have effect for the purposes of a person's liability to income tax for the tax year 2013-14 or any subsequent tax year.

• (2) Sub-paragraph (1) is without prejudice to any provision in this Part of the Schedule about the application of a particular amendment.

Savings

73

• (1) This paragraph applies to an individual who—

• (a) was resident in the United Kingdom for the tax year 2012-13, but

• (b) was not ordinarily resident there at the end of the tax year 2012-13.

• (2) The provisions listed in sub-paragraph (3) have effect, in relation to such an individual and a qualifying tax year, as if the amendments made to or with respect to those provisions by this Part of this Schedule had not been made.

• (3) The provisions are—

• (a) section 413 of ITEPA 2003 (exception for payments and benefits on termination of employment etc in certain cases involving foreign service),

• (b) section 414 of that Act (reduction in other cases of foreign service), and

• (c) Chapter 2 of Part 13 of ITA 2007 (transfer of assets abroad).

• (4) But, in the case of provisions within paragraph (a) or (b) of sub-paragraph (3), this paragraph applies only if service in the employment in question began before the start of the tax year 2013-14.

• (5) The meaning of “qualifying tax year” depends on the individual's residence status—

• (a) if the individual was resident in the United Kingdom for the tax year 2010-11 and the tax year 2011-12, “qualifying tax year” means the tax year 2013-14,

• (b) if the individual was not resident in the United Kingdom for the tax year 2010-11 but was resident in the United Kingdom for the tax year 2011-12, “qualifying tax year” means each of the tax year 2013-14 and the tax year 2014-15, and

• (c) if the individual was not resident in the United Kingdom for the tax year 2011-12, “qualifying tax year” means each of the tax year 2013-14, the tax year 2014-15 and the tax year 2015-16.

• (6) Where, by virtue of this paragraph, it is necessary to determine whether an individual is (or is not) ordinarily resident in the United Kingdom at a time on or after 6 April 2013, the question is to be determined as it would have been in the absence of this Schedule.

PART 3 — Capital gains tax: accruals basis of taxation

TCGA 1992

74

TCGA 1992 is amended as follows.

75

• (1) Section 2 (persons and gains chargeable to capital gains tax, and allowable losses) is amended as follows.

• (2) In subsection (1), for the words from “during any part” to the end substitute “ if the residence condition is met ”.

• (3) After that subsection insert—

(1A) The residence condition is— (a) in the case of an individual, that the individual is resident in the United Kingdom for the year in question, (b) in the case of personal representatives of a deceased person, that the single and continuing body mentioned in section 62(3) is resident in the United Kingdom, (c) in the case of the trustees of a settlement, that the single person mentioned in section 69(1) is resident in the United Kingdom during any part of the year in question, and (d) in any other case, that the person is resident in the United Kingdom when the gain accrues.

76

In section 10 (non-resident with United Kingdom branch or agency), in subsection (1), for “in which he is not resident and not ordinarily resident in the United Kingdom but” substitute “ if the residence condition is not met (see section 2(1A)) but the person ”.

77

• (1) Section 13 (attribution of gains to members of non-resident companies) is amended as follows.

• (2) In subsection (2), omit “or ordinarily resident”.

• (3) In subsection (10), for “neither resident nor ordinarily resident” substitute “ not resident ”.

• (4) In subsection (13)(b), omit “or ordinarily resident”.

78

In section 16 (computation of losses), in subsection (3), for “during no part of which he is resident or ordinarily resident in the United Kingdom” substitute “ where the residence condition is not met (see section 2(1A)) ”.

79

In section 62 (death: general provisions), in subsection (3), omit “, ordinary residence,”.

80

In section 65 (liability for tax of trustees or personal representatives), in subsection (3)(b), for “become neither resident nor ordinarily resident” substitute “ cease to be resident ”.

81

In section 67 (provisions applicable where section 79 of the Finance Act 1980 has applied), in subsection (6)(a), in paragraph (b) of the substituted subsection (1), for “ becomes neither resident nor ordinarily resident ” substitute “ ceases to be resident ”.

82

• (1) Section 69 (trustees of settlements) is amended as follows.

• (2) In subsection (2), omit “and ordinarily resident”.

• (3) In subsection (2B)(c), omit “, ordinarily resident”.

• (4) In subsection (2E), for the words from “and ordinarily resident” to the end substitute “ in the United Kingdom, then for the purposes of this Act it is treated as being not resident in the United Kingdom ”.

83

In section 76 (disposal of interests in settled property), in subsection (1B)(a), for “neither resident nor ordinarily resident” substitute “ not resident ”.

84

In section 80 (trustees ceasing to be resident in UK), in subsection (1), for “neither resident nor ordinarily resident” substitute “ not resident ”.

85

• (1) Section 81 (death of trustee: special rules) is amended as follows.

• (2) In subsection (1)(b), omit “and ordinarily resident”.

• (3) In subsection (3)(b), omit “and ordinarily resident”.

• (4) In subsection (4)(b), omit “and ordinarily resident”.

• (5) In subsection (5)(a), omit “and ordinarily resident”.

86

In section 82 (past trustees: liability for tax), in subsection (3)(b), for “become neither resident nor ordinarily resident” substitute “ cease to be resident ”.

87

In section 83 (trustees ceasing to be liable to UK tax), in subsection (1), omit “and ordinarily resident”.

88

• (1) Section 83A (trustees both resident and non-resident in a year of assessment) is amended as follows.

• (2) In subsection (3)(a), omit “and ordinarily resident”.

• (3) In subsection (4)—

• (a) in paragraph (a), for “neither resident nor ordinarily resident” substitute “ not resident ”, and

• (b) in paragraph (b), omit “and ordinarily resident”.

89

In section 84 (acquisition by dual resident trustees), in subsection (1)(b), omit “and ordinarily resident”.

90

In section 85 (disposal of interests in non-resident settlements), in subsection (1), for “neither resident nor ordinarily resident” substitute “ not resident ”.

91

• (1) Section 86 (attribution of gains to settlors with interest in non-resident or dual resident settlements) is amended as follows.

• (2) In subsection (1)(c), for the words from “either resident” to the end substitute “ resident in the United Kingdom for the year ”.

• (3) For subsection (2) substitute—

(2) The condition as to residence is that— (a) there is no time in the year when the trustees are resident in the United Kingdom, or (b) there is such a time but, whenever the trustees are resident in the United Kingdom during the year, they fall to be regarded for the purposes of any double taxation relief arrangements as resident in a territory outside the United Kingdom.

• (4) In subsection (3), omit “and ordinarily resident”.

92

• (1) Section 87 (non-UK resident settlements: attribution of gains to beneficiaries) is amended as follows.

• (2) In subsection (1), for the words from “the trustees” to the end substitute “ there is no time in that year when the trustees are resident in the United Kingdom ”.

• (3) In subsection (4)(a), omit “and ordinarily resident”.

93

In section 88(1) (gains of dual resident settlements)—

• (a) in paragraph (a), omit “and ordinarily resident”, and

• (b) in paragraph (b), omit “and ordinary residence”.

94

• (1) Section 96 (payments by and to companies) is amended as follows.

• (2) In subsection (3), omit “or ordinarily resident”.

• (3) In subsection (4), in each of paragraphs (a) and (b), omit “or ordinarily resident”.

• (4) In subsection (5)(b), omit “or ordinary residence”.

95

In section 97 (supplementary provisions), in subsection (1)(a), for “neither resident nor ordinarily resident” substitute “ not resident ”.

96

In section 99 (application of Act to unit trust schemes), in subsection (1)(c), omit “and ordinarily resident”.

97

In section 106A(5A) (identification of securities: capital gains tax)—

• (a) in paragraph (a), for “neither resident nor ordinarily resident” substitute “ not resident ”, and

• (b) in paragraph (b), omit “or ordinarily resident”.

98

• (1) Section 159 (non-residents: roll-over relief) is amended as follows.

• (2) In subsection (2)(b), omit “or ordinarily resident”.

• (3) In subsection (5), in the definition of “dual resident”, omit “or ordinarily resident”.

99

• (1) Section 166 (gifts to non-residents) is amended as follows.

• (2) In subsection (1), for “neither resident nor ordinarily resident” substitute “ not resident ”.

• (3) In subsection (2)(a), omit “or ordinarily resident”.

100

• (1) Section 167 (gifts to foreign-controlled companies) is amended as follows.

• (2) In subsection (2)(a), for “neither resident nor ordinarily resident” substitute “ not resident ”.

• (3) In subsection (3), for the words from “or ordinarily resident” to “nor ordinarily resident” substitute “ in the United Kingdom is to be regarded as not resident ”.

101

• (1) Section 168 (emigration of donee) is amended as follows.

• (2) In subsection (1)(b), for “becomes neither resident nor ordinarily resident” substitute “ ceases to be resident ”.

• (3) In subsection (4), for “becoming neither resident nor ordinarily resident” substitute “ ceasing to be resident ”.

• (4) In subsection (5)—

• (a) in paragraph (a), for “becoming neither resident nor ordinarily resident” substitute “ ceasing to be resident ”, and

• (b) in paragraph (b), omit “or ordinarily resident”.

102

In section 169 (gifts into dual resident trusts), in subsection (3)(a), omit “and ordinarily resident”.

103

In section 199 (exploration or exploitation assets: deemed disposals), in subsection (2), for “who is not resident and not ordinarily resident in the United Kingdom” substitute “ in respect of whom the residence condition (see section 2(1A)) is not met ”.

104

• (1) Section 261 (section 260 relief: gifts to non-residents) is amended as follows.

• (2) In subsection (1), for “neither resident nor ordinarily resident” substitute “ not resident ”.

• (3) In subsection (2)(a), omit “or ordinarily resident”.

105

In Schedule 1 (application of exempt amount and reporting limits in cases involving settled property), in paragraph 2(7)(a), omit “and ordinarily resident”.

106

• (1) Schedule 4A (disposal of interest in settled property: deemed disposal of underlying assets) is amended as follows.

• (2) In paragraph 5(1) and (2), omit “and ordinarily resident”.

• (3) In paragraph 6(1)—

• (a) for “in the relevant” substitute “ as respects the relevant ”, and

• (b) for the words from “either” to the end substitute “ met the residence condition set out in section 2(1A) ”.

• (4) If any of the previous 5 years of assessment mentioned in paragraph 6(1) of Schedule 4A ends before 6 April 2013, the test in that paragraph is to be applied, as respects any such year ending before that date, as if that paragraph had not been amended by sub-paragraph (3).

107

• (1) Schedule 4C (transfers of value: attribution of gains to beneficiaries) is amended as follows.

• (2) In paragraph 1A(3), for the words from “the beneficiary” to the end substitute “ , as respects that year, the beneficiary meets the residence condition set out in section 2(1A) ”.

• (3) In paragraph 4—

• (a) in sub-paragraph (1), omit “and ordinarily resident”, and

• (b) in sub-paragraph (2), omit “and ordinarily resident”.

• (4) In paragraph 5(1)—

• (a) in paragraph (a), omit “and ordinarily resident”, and

• (b) in paragraph (b), omit “and ordinary residence”.

• (5) In paragraph 9(3)(a)(i), omit “and ordinarily resident”.

• (6) In paragraph 10(1), omit “and ordinarily resident”.

108

• (1) Schedule 5 (attribution of gains to settlors with interest in non-resident or dual resident settlement) is amended as follows.

• (2) In paragraph 2A(4)—

• (a) in paragraph (a), for “become on or after 17th March 1998 neither resident nor ordinarily resident” substitute “ cease on or after 17 March 1998 to be resident ”, and

• (b) in paragraph (b), omit “and ordinarily resident”.

• (3) In paragraph 9(4)—

• (a) in paragraph (a), for “become on or after 19th March 1991 neither resident nor ordinarily resident” substitute “ cease on or after 19 March 1991 to be resident ”, and

• (b) in paragraph (b), omit “and ordinarily resident”.

• (4) The amendments made by this paragraph apply to changes in the residence status of trustees on or after 6 April 2013.

109

• (1) Schedule 5A (settlements with foreign element: information) is amended as follows.

• (2) In paragraph 2(1)—

• (a) in paragraph (c), for “neither resident nor ordinarily resident” substitute “ not resident ”, and

• (b) in paragraph (d), omit “and ordinarily resident”.

• (3) In paragraph 3—

• (a) in sub-paragraph (1)—

• (i) in paragraph (a), for “neither resident nor ordinarily resident” substitute “ not resident ”, and

• (ii) in paragraph (b), omit “and ordinarily resident”, and

• (b) in sub-paragraph (3), for “either resident or ordinarily resident” substitute “ resident ”.

• (4) In paragraph 4—

• (a) in sub-paragraph (1)—

• (i) in paragraph (a), for “neither resident nor ordinarily resident” substitute “ not resident ”, and

• (ii) in paragraph (b), omit “and ordinarily resident”, and

• (b) in sub-paragraph (3), for “either resident or ordinarily resident” substitute “ resident ”.

• (5) In paragraph 5(1)—

• (a) in paragraph (a), for the words from “become” to “ordinarily resident” substitute “ cease at any time (the relevant time) on or after the commencement day to be resident ”, and

• (b) in paragraph (b), omit “and ordinarily resident”.

• (6) The amendments made by this paragraph apply as follows—

• (a) the amendments made by sub-paragraph (2) apply in relation to transfers of property made on or after 6 April 2013,

• (b) the amendments made by sub-paragraphs (3) and (4) apply in relation to settlements created on or after that date, and

• (c) the amendments made by sub-paragraph (5) apply to changes in the residence status of trustees on or after that date.

110

• (1) Schedule 5B (enterprise investment scheme: re-investment) is amended as follows.

• (2) In paragraph 1—

• (a) in sub-paragraph (1)(d), omit “or ordinarily resident”, and

• (b) in sub-paragraph (4)(a), omit “or ordinarily resident”.

• (3) In paragraph 3(3)(b), omit “or ordinarily resident”.

• (4) In paragraph 19(1), in the definition of “non-resident”, for “neither resident nor ordinarily resident” substitute “ not resident ”.

• (5) The amendments made by this paragraph apply in cases where the accrual time is on or after 6 April 2013 (even if the qualifying investment was made before that date).

111

In Schedule 7C (reliefs for transfers to approved share plans), in paragraph 8, for paragraph (a) substitute—

(a) the claimant would be chargeable to capital gains tax under section 2(1) (persons and gains chargeable to capital gains tax) in respect of the gain, or

.

Commencement

112

• (1) The amendments made by this Part of this Schedule have effect in relation to a person's liability to capital gains tax for the tax year 2013-14 or any subsequent tax year.

• (2) Sub-paragraph (1) is without prejudice to any provision in this Part of this Schedule about the application of a particular amendment.

PART 4 — Other amendments

FA 1916

113

In FA 1916, omit section 63 (exemption from taxation of municipal securities issued in America).

F(No.2)A 1931

114

• (1) In section 22 of F(No.2)A 1931 (provisions in cases where Treasury has power to borrow money), in subsection (1)(a) and (b), omit “ordinarily”.

• (2) Nothing in sub-paragraph (1) limits the power conferred by section 60(1) of FA 1940.

• (3) Subject to sub-paragraph (5), the amendment made by sub-paragraph (1) does not affect a pre-commencement security (nor the availability of the relevant exemption).

• (4) Sub-paragraph (5) applies to a person who becomes the beneficial owner of a pre-commencement security (or an interest in such a security) on or after 6 April 2013.

• (5) If obtaining the relevant exemption is conditional on being not ordinarily resident in the United Kingdom, any enactment conferring the exemption is to have effect (in relation to a person to whom this sub-paragraph applies) as if obtaining the exemption were conditional instead on being not resident in the United Kingdom.

• (6) In this paragraph—

• “pre-commencement security” means a FOTRA security (as defined in section 713 of ITTOIA 2005) issued before the day on which this Act is passed;

• “the relevant exemption”, in relation to a pre-commencement security, means the exemption for which provision is made in the exemption condition (as defined in that section).

TMA 1970

115

TMA 1970 is amended as follows.

116

• (1) In section 98 (special returns etc), in subsection (4E)(d), omit “ordinarily”.

• (2) The amendment made by this paragraph takes effect on the coming into force of regulations made under section 17(3) of F(No.2)A 2005 (authorised investment funds) by virtue of the amendment made by paragraph 136.

117

In Schedule 1A (claims etc not included in returns), in paragraph 2(6), omit “or not ordinarily resident”.

IHTA 1984

118

• (1) Section 157 of IHTA 1984 (non-residents' bank accounts) is amended as follows.

• (2) For subsection (2) substitute—

(2) This section applies to a person who is not domiciled and not resident in the United Kingdom immediately before his death.

• (3) In subsection (3), for “, resident or ordinarily resident” substitute “ or resident ”.

• (4) In subsection (4)—

• (a) in paragraph (a), omit “or ordinarily resident”, and

• (b) in paragraph (b), omit “or ordinarily resident” and “and ordinarily resident”.

• (5) The amendments made by this paragraph do not apply if the person dies before 6 April 2013.

FA 2004

119

Part 4 of FA 2004 (pension schemes etc) is amended as follows.

120

In section 185G (disposal by person holding directly), in subsection (3)(a), omit “, ordinarily resident”.

121

In section 205 (short service refund lump sum charge), in subsection (3), omit “, ordinarily resident”.

122

In section 205A (serious ill-health lump sum charge), in subsection (3), omit “, ordinarily resident”.

123

In section 206 (special lump sum death benefits charge), in subsection (3), omit “, ordinarily resident”.

124

In section 207 (authorised surplus payments charge), in subsection (3), omit “, ordinarily resident”.

125

In section 208 (unauthorised payments charge), in subsection (4), omit “, ordinarily resident”.

126

In section 209 (unauthorised payments surcharge), in subsection (5), omit “, ordinarily resident”.

127

In section 217 (persons liable to lifetime allowance charge), in subsection (5), omit “, ordinarily resident”.

128

In section 237A (liability of individual to annual allowance charge), in subsection (2), omit “, ordinarily resident”.

129

In section 237B (liability of scheme administrator), in subsection (8), omit “, ordinarily resident”.

130

In section 239 (scheme sanction charge), in subsection (4), omit “, ordinarily resident”.

131

In section 242 (de-registration charge), in subsection (3), omit “, ordinarily resident”.

132

The amendments of Part 4 of FA 2004 made by this Part of this Schedule have effect in relation to the tax year 2013-14 and any subsequent tax year.

FA 2005

133

• (1) In section 30 of FA 2005 (qualifying trust gains: special capital gains tax treatment), in subsection (1), for paragraph (c) substitute—

(c) the trustees are resident in the United Kingdom during any part of the tax year, and

.

• (2) The amendment made by this paragraph has effect in relation to the tax year 2013-14 and any subsequent tax year.

F(No.2)A 2005

134

F(No.2)A 2005 is amended as follows.

135

• (1) In section 7 (charge to income tax on lump sum), in subsection (3), omit “, ordinarily resident”.

• (2) The amendment made by this paragraph has effect in relation to the tax year 2013-14 and any subsequent tax year.

136

In section 18 (section 17(3): specific powers), in subsection (1)(f) and (g), omit “ordinarily”.

CTA 2009

137

CTA 2009 is amended as follows.

138

• (1) In section 900 (which relates to roll-over relief for disposals of pre-FA 2002 assets), in subsection (2), omit “or ordinarily UK resident”.

• (2) The amendment made by this paragraph applies in relation to gains accruing or treated as accruing on or after 6 April 2013.

139

• (1) In section 936 (meaning of “UK estate” and “foreign estate”), in subsection (3), omit “or not ordinarily UK resident”.

• (2) The amendment made by this paragraph applies if the tax year in question begins on or after 6 April 2013.

140

• (1) In section 947 (aggregate income of the estate), in subsection (2)(b)(i), omit “who was ordinarily UK resident”.

• (2) The amendment made by this paragraph applies if the tax year in question begins on or after 6 April 2013.

141

• (1) In section 1009 (conditions relating to employee's income tax position), in subsection (5)(a), omit “and ordinarily UK resident”.

• (2) The amendment made by this paragraph applies in relation to shares acquired on or after 6 April 2013.

142

• (1) In section 1017 (condition relating to employee's income tax position), in subsection (4)(a), omit “and ordinarily UK resident”.

• (2) The amendment made by this paragraph applies in relation to options obtained on or after 6 April 2013.

143

• (1) In section 1025 (additional relief available if shares acquired are restricted shares), in subsection (5)(a), omit “and ordinarily UK resident”.

• (2) The amendment made by this paragraph applies in relation to restricted shares acquired on or after 6 April 2013.

144

• (1) In section 1032 (meaning of “chargeable event”), in subsection (5)(a), omit “and ordinarily UK resident”.

• (2) The amendment made by this paragraph applies in relation to convertible shares acquired on or after 6 April 2013.

CTA 2010

145

• (1) Section 1034 of CTA 2010 (purchase by unquoted trading company of own shares: requirements as to residence) is amended as follows.

• (2) In subsections (1) and (2), omit “and ordinarily resident”.

• (3) In subsection (3), omit “and ordinary residence” in both places.

• (4) Omit subsection (4).

• (5) The amendments made by this paragraph do not apply in relation to a purchase by an unquoted trading company of its own shares if the purchase takes place before 6 April 2013.

TIOPA 2010

146

In section 363A of TIOPA 2010 (residence of offshore funds which are undertakings for collective investment in transferable securities), in subsection (3), for “neither resident nor ordinarily resident” substitute “ not resident ”.

Constitutional Reform and Governance Act 2010

147

• (1) In section 41 of the Constitutional Reform and Governance Act 2010 (tax status of MPs and members of the House of Lords), in subsection (2), omit “, ordinarily resident”.

• (2) The amendment made by this paragraph has effect for the purposes of a member's liability to income tax or capital gains tax for the tax year 2013-14 or any subsequent tax year.

SCHEDULE 47

Relevant finance leases etc

1

Part 9A of TIOPA 2010 (controlled foreign companies) is amended as follows.

2

Chapter 5 (the CFC charge gateway: non-trading finance profits) is amended as follows.

3

In section 371ED (arrangements in lieu of dividends) in subsection (1) omit “(other than a relevant finance lease)”.

4

• (1) Section 371EE (leases to UK resident companies etc) is amended as follows.

• (2) In subsection (2)(b)(i) for “which is the subject of the lease” substitute “ (“the relevant asset”) which is the subject of the lease or making (directly or indirectly) an arrangement which would fall within subsection (3) ”.

• (3) After subsection (2) insert—

(3) An arrangement would fall within this subsection if— (a) the arrangement would meet one or both of the following requirements— (i) it would not be a relevant finance lease; (ii) it would not involve the CFC, and (b) under the arrangement the other company would (directly or indirectly) purchase rights to use the relevant asset.

5

Chapter 22 (supplementary provision) is amended as follows.

6

In section 371VA (definitions) for the definition of “relevant finance lease” substitute—

“relevant finance lease” is to be read in accordance with section 371VIA,

.

7

• (1) Section 371VG (finance profits) is amended as follows.

• (2) In subsection (1) for paragraph (b) substitute—

(b) which are included in the CFC's assumed total profits for the accounting period in question and which— (i) arise from a relevant finance lease, but (ii) are not trading profits.

• (3) In subsection (4)(b) omit “an arrangement which would be”.

8

• (1) Section 371VH (interests in companies) is amended as follows.

• (2) In subsection (9) omit the second sentence.

• (3) After subsection (10) insert—

(10A) For the purposes of subsection (9), if for any relevant period accounts for a loan creditor are not prepared in accordance with international accounting standards or UK generally accepted accounting practice, any question relating to generally accepted accounting practice is to be determined in relation to the loan creditor for that period by reference to generally accepted accounting practice in relation to accounts prepared in accordance with international accounting standards.

9

After section 371VI insert—

(371VIA) (1) In this Part “relevant finance lease” means an arrangement falling within subsection (2) or (3). (An arrangement which is a loan relationship of any company does not fall within either of those subsections.) (2) An arrangement falls within this subsection if— (a) it provides for an asset to be leased or otherwise made available by a person (“the lessor”) to another person, and (b) in accordance with generally accepted accounting practice, it falls (or would fall) to be treated in the accounts of the lessor, or of a person connected with the lessor, as a finance lease or a loan. (3) A hire-purchase, conditional sale or other arrangement relating to an asset falls within this subsection if it does not fall within subsection (2) but is of a similar character to an arrangement which would fall within that subsection. (4) If for any relevant period accounts for a person are not prepared in accordance with international accounting standards or UK generally accepted accounting practice, any question relating to generally accepted accounting practice is to be determined for the purposes of this section in relation to that person for that period by reference to generally accepted accounting practice in relation to accounts prepared in accordance with international accounting standards. (5) In this section “accounts”, in relation to a company, includes accounts relating to two or more companies of which that company is one.

Limit on double taxation relief in cases involving qualifying loan relationships of CFCs

10

Part 2 of TIOPA 2010 (double taxation relief) is amended as follows.

11

Chapter 2 (double taxation relief by way of credit) is amended as follows.

12

In section 42 (limit on credit against corporation tax) after subsection (4) insert—

(5) See also section 49A which contains an additional limit on credit allowed in certain cases involving CFCs.

13

After section 49 insert—

(49A) (1) This section applies if— (a) a claim is made under Chapter 9 of Part 9A (controlled foreign companies: exemptions for profits from qualifying loan relationships) in relation to an accounting period (“the relevant period”) of a CFC (“the creditor CFC”), (b) in the relevant period, the creditor CFC has a qualifying loan relationship in relation to which another CFC is the ultimate debtor by virtue of section 371IG(4) or (5), and (c) a UK resident company (“the relevant UK company”) has loan relationship credits which arise in the relevant period from— (i) loan B (see section 371IG(3)(b)), or (ii) loans out of which loan B is wholly or partly funded (directly or indirectly). (2) So far as any credit allowed under section 18(2) to the relevant UK company is referable to loan relationship credits falling within subsection (1)(c) which arise in an accounting period of the relevant UK company, the credit must not exceed— $$R × S$where—R has the same meaning as in section 42(2), andS is—the relevant UK company's share of the relevant profit amount (see subsection (4)), orif only X% of the total amount of the loan relationship credits falling within subsection (1)(c) arises in the accounting period, X% of the relevant UK company's share of the relevant profit amount.(If the amount given by the formula above is nil, no credit is allowed.)$ (3) The limit on credit contained in subsection (2) is in addition to the limit given by section 42(2). (4) Take the following steps to determine the relevant profit amount and the relevant UK company's share of that amount. - Step 1 Determine the total amount of the loan relationship credits which arise in the relevant period from loan B to the person who made loan B. - Step 2 Deduct from the amount determined at step 1 above the credits from the creditor CFC's qualifying loan relationship determined at step 1 in section 371IF for the relevant period. The result is the relevant profit amount. - Step 3 On a just and reasonable basis, apportion the relevant profit amount amongst all the persons falling within subsection (5) (although the amount apportioned to a person may be nil). The relevant UK company's share of the relevant profit amount is the amount apportioned to it (and is nil if no amount is apportioned to it). (5) The following persons (apart from the creditor CFC) fall within this subsection— (a) the person who made loan B, and (b) any person who has made or received a loan out of which loan B is wholly or partly funded (directly or indirectly). (6) In this section— (a) references to loan B do not include any part of loan B— (i) which loan A (see section 371IG(3)(a)) is not made and used to fund, or (ii) in relation to which the requirement of section 371IG(3)(c) is not met, (b) “loan relationship credit” means, in relation to a person, a credit which the person has under Part 5 of CTA 2009 or would have were the person a UK resident company within the charge to corporation tax, and (c) “loan” has the same meaning as it has in Chapter 9 of Part 9A.

14

• (1) In Chapter 3 (miscellaneous provisions), section 112 (deduction from income for foreign tax (instead of credit against UK tax)) is amended as follows.

• (2) After subsection (3) insert—

(3A) Subsection (3B) applies if— (a) the requirements of section 49A(1)(a) to (c) are met, (b) amounts have been paid in respect of non-UK tax on loan relationship credits falling within section 49A(1)(c) which arise in an accounting period of the relevant UK company, and (c) apart from subsection (3B), Z would exceed $$R × S$where—Z is—the total amount of any reductions under subsection (1) for amounts paid in respect of that non-UK tax, lessthe total amount of any increases under subsection (3) for payments made by reference to that non-UK tax, andR and S have the same meaning as in section 49A(2).R and S have the same meaning as in section 49A(2).$ (3B) The total amount of the reductions under subsection (1) is to be reduced so that Z equals $R × S$

• (3) In subsection (6), for “subsection (1)” substitute “ this section ”.

Miscellaneous

15

In Part 6 of TIOPA 2010 (tax arbitrage), in section 236 (deduction schemes involving hybrid entities) for subsection (4) substitute—

(4) Condition B is not met just because the party's profits or gains are subject to a charge under the law of a territory outside the United Kingdom (by whatever name known) which is similar to the CFC charge (see Part 9A).

16

Part 9A of TIOPA 2010 (controlled foreign companies) is amended as follows.

17

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

18

Chapter 9 (exemptions for profits from qualifying loan relationships) is amended as follows.

19

In section 371IB (loans funded out of qualifying resources) after subsection (9) insert—

(9A) Subsection (9) does not apply if the debt incurred by the member of the CFC group as mentioned in subsection (8) represents the principal on a loan made to the member to which subsection (9B) or (9D) applies. (9B) This subsection applies to a loan if the member repays it within 48 hours of the loan being made. (9C) But subsection (9B) does not apply to a loan if the repayment of the loan within the 48 hours occurs under, or is connected (directly or indirectly) with, an arrangement the main purpose, or one of the main purposes, of which is to ensure that subsection (9) does not apply because of— (a) the loan, or (b) any other debt which a member of the CFC group incurs (or is expected to incur) in the United Kingdom. (9D) This subsection applies to a loan if— (a) there is an issue of shares which meets the requirements of subsection (7)(c)(i) to (iii), (b) the loan was made before the issue of shares but with the expectation that it would be repaid by the member out of funds deriving (directly or indirectly) from the issue of shares, (c) the loan is repaid by the member out of such funds within the period of 6 months beginning with the day on which the loan was made, and (d) the loan— (i) was made by a person who was not a member of the CFC group, and (ii) was not made (wholly or partly nor directly or indirectly) out of funds or other assets provided by a member of the CFC group.

20

• (1) Section 371IE (matched interest) is amended as follows.

• (2) In subsection (1)(d)(ii) after “include” insert “ some or all of ”.

• (3) After subsection (7) insert—

(7A) In subsection (6) the reference to the leftover profits is to those profits so far as they would be included in the relevant finance profits (see section 314A(1)(d)).

Commencement and transitional provision

21

The amendments made by this Schedule are treated as having come into force on 1 January 2013.

22

• (1) Section 371CE of TIOPA 2010 (as amended by paragraph 17 above) applies for accounting periods of CFCs beginning before 20 March 2013 with the modifications set out in this paragraph. References below to subsections are to subsections of section 371CE.

Accounting periods ending before 20 March 20132For accounting periods ending before 20 March 2013, subsection (4) applies as if paragraph (b) were omitted.

Accounting periods ending on or after 20 March 20133The following sub-paragraphs apply for accounting periods ending on or after 20 March 2013.4A notice may be given under subsection (2)(b) even though the requirement of subsection (2)(a) is not met.5If a notice is given under subsection (2)(b) in a case where the requirement of subsection (2)(a) is not met, the CFC's trading finance profits are to be apportioned on a just and reasonable basis between—athe part of the accounting period falling before 20 March 2013 (“period A”), andbthe remaining part of the accounting period (“period B”).6So far as the CFC's trading finance profits are apportioned to period A, they are to be treated as non-trading finance profits if the CFC is a group treasury company in period A (and subsection (3) applies to them accordingly).7For the purpose of determining if the CFC is a group treasury company in period A, subsection (4) applies—aas if references to the accounting period were to period A, andbas if paragraph (b) were omitted.8So far as the CFC's trading finance profits are apportioned to period B, they are to be treated as non-trading finance profits if the CFC is a group treasury company in period B (and subsection (3) applies to them accordingly).9For the purpose of determining if the CFC is a group treasury company in period B, subsection (4) applies as if references to the accounting period were to period B.

SCHEDULE 48

Proceeds of Crime Act 2002

1

The Proceeds of Crime Act 2002 is amended in accordance with paragraphs 2 to 20.

2

• (1) Section 289 (searches) is amended as follows.

• (2) In subsections (1), (1A)(a) and (2), for “a customs officer” substitute “ an officer of Revenue and Customs ”.

• (3) In subsections (1C) and (1D), for “customs officer” substitute “ officer of Revenue and Customs ”.

• (4) After subsection (5)(b) insert—

(ba) are exercisable by an officer of Revenue and Customs only so far as the officer is exercising a function relating to a matter other than an excluded matter,

.

• (5) After subsection (5) insert—

(5A) The reference in subsection (5)(ba) to an excluded matter is to a matter specified in section 54(4)(b) of, or in any of paragraphs 3, 5, 7, 10, 12 and 14 to 30 of Schedule 1 to, the Commissioners for Revenue and Customs Act 2005.

3

In section 290 (prior approval for search)—

• (a) in subsection (4)(a), for “a customs officer, a customs officer” substitute “ an officer of Revenue and Customs, such an officer ”, and

• (b) in subsection (6), for “customs officer” substitute “ officer of Revenue and Customs ”.

4

In section 291(2) (report on exercise of powers), for “customs officer” substitute “ officer of Revenue and Customs ”.

5

In section 292 (code of practice)—

• (a) in subsection (1), for “customs officers” substitute “ officers of Revenue and Customs ”, and

• (b) in subsection (6), for “a customs officer” substitute “ an officer of Revenue and Customs ”.

6

• (1) Section 294 (seizure of cash) is amended as follows.

• (2) In subsections (1) and (2), for “A customs officer” substitute “ An officer of Revenue and Customs ”.

• (3) After subsection (2) insert—

(2A) The powers conferred by this section are exercisable by an officer of Revenue and Customs only so far as the officer is exercising a function relating to a matter other than an excluded matter. (2B) But the powers may be exercised by the officer in reliance on a suspicion that relates to an excluded matter. (2C) The reference in subsection (2A) to an excluded matter is to a matter specified in section 54(4)(b) of, or in any of paragraphs 3, 5, 7, 10, 12 and 14 to 30 of Schedule 1 to, the Commissioners for Revenue and Customs Act 2005.

7

In section 295(1) (detention of seized cash), for “customs officer” substitute “ officer of Revenue and Customs ”.

8

In section 296(2) (interest on cash), for “customs officer” substitute “ officer of Revenue and Customs ”.

9

In section 297(4) (release of detained cash), for “A customs officer” substitute “ An officer of Revenue and Customs ”.

10

In section 302(6) (compensation), for “a customs officer” substitute “ an officer of Revenue and Customs ”.

11

In section 351(5) (person making application to vary or discharge order)—

• (a) for “a customs officer” substitute “ an officer of Revenue and Customs ”, and

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

12

• (1) Section 352 (search and seizure warrants) is amended as follows.

• (2) In subsection (5)—

• (a) omit paragraph (a), and

• (b) in paragraph (c), at the end insert “ , a confiscation investigation or a money laundering investigation ”.

• (3) In subsection (7), omit “(a) or”.

13

• (1) Section 353 (requirements where production order not available) is amended as follows.

• (2) In subsection (10)—

• (a) omit paragraph (a), and

• (b) in paragraph (c), at the end insert “ , a confiscation investigation or a money laundering investigation ”.

• (3) In subsection (11), omit “(a) or”.

14

• (1) Section 369 (customer information orders: supplementary provisions) is amended as follows.

• (2) In subsection (5)—

• (a) for “a customs officer” substitute “ an officer of Revenue and Customs ”, and

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

• (3) In subsection (7), for “a customs officer” substitute “ an officer of Revenue and Customs ”.

15

In section 375(4) (account monitoring orders: supplementary provisions)—

• (a) for “a customs officer” substitute “ an officer of Revenue and Customs ”, and

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

16

After section 375B insert—

(375C) (1) This section applies to the powers conferred on an officer of Revenue and Customs which are exercisable in connection with— (a) a production order made or to be made in relation to a confiscation investigation or a money laundering investigation, (b) a search and seizure warrant issued or to be issued in relation to a confiscation investigation or a money laundering investigation, (c) a customer information order, and (d) an account monitoring order. (2) The powers are exercisable by the officer only so far as the officer is exercising a function relating to a matter other than an excluded matter. (3) The reference in subsection (2) to an excluded matter is to a matter specified in section 54(4)(b) of, or in any of paragraphs 3, 5, 7, 10, 12 and 14 to 30 of Schedule 1 to, the Commissioners for Revenue and Customs Act 2005.

17

In section 377(1) (persons subject to code of practice), for paragraph (e) substitute—

(e) officers of Revenue and Customs;

18

In section 378 (officers)—

• (a) in subsection (1), for paragraph (d) substitute—

(d) an officer of Revenue and Customs;

,

• (b) in subsections (2)(c) and (6)(b), for “a customs officer” substitute “ an officer of Revenue and Customs ”, and

• (c) in subsection (4), for paragraph (c) substitute—

(c) an officer of Revenue and Customs;

19

After section 408B insert—

(408C) (1) This section applies to the powers conferred on an officer of Revenue and Customs which are exercisable in connection with— (a) a production order made or to be made in relation to a confiscation investigation or a money laundering investigation, (b) a search warrant issued or to be issued in relation to a confiscation investigation or a money laundering investigation, (c) a customer information order, and (d) an account monitoring order. (2) The powers are exercisable by the officer only so far as the officer is exercising a function relating to a matter other than an excluded matter. (3) The reference in subsection (2) to an excluded matter is to a matter specified in section 54(4)(b) of, or in any of paragraphs 3, 5, 7, 10, 12 and 14 to 30 of Schedule 1 to, the Commissioners for Revenue and Customs Act 2005.

20

In section 412 (interpretation), in the entry relating to the meaning of references to a “constable”, for “a customs and excise officer” substitute “ an officer of Revenue and Customs ”.

Commissioners for Revenue and Customs Act 2005

21

In Schedule 2 to the Commissioners for Revenue and Customs Act 2005 (restrictions on functions of Commissioner and officers), omit—

• (a) paragraphs 13 and 13A, and

• (b) the italic heading immediately preceding those paragraphs.

Relationship of provisions of 2005 Act with provisions of 2002 Act

22

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

• (a) Chapter 3 of Part 5 of the Proceeds of Crime Act 2002 (as amended by this Schedule), or

• (b) Chapters 2 and 3 of Part 8 of that Act (as so amended).

Consequential amendments

23

In section 80(1) and (3) of the Serious Crime Act 2007 (amendment of sections 352(5) and 353(10) of the Proceeds of Crime Act 2002), omit paragraph (a) and the word “and” at the end of that paragraph.

24

In Schedule 7 to the Policing and Crime Act 2009 (minor and consequential amendments), omit paragraph 116.

SCHEDULE 49

Amendments of TMA 1970

1

TMA 1970 is amended in accordance with paragraphs 2 to 6.

2

After section 59F insert—

(59FA) (1) Schedule 3ZB contains provisions about exit charge payment plans in accordance with which companies may defer payment of certain corporation tax. (2) Parts 1 and 2 of the Schedule each make provision about the circumstances in which an exit charge payment plan may be entered into, and about determining the amount of corporation tax that may be deferred— (a) see Part 1 in relation to a company which ceases to be resident in the United Kingdom, and (b) see Part 2 in relation to a company which is not resident in the United Kingdom but which carries on, or has carried on, a trade in the United Kingdom through a permanent establishment there. (3) Part 3 of the Schedule contains provision about— (a) entering into an exit charge payment plan, (b) the effect of such a plan, (c) the content of such a plan, and (d) the methods in accordance with which tax deferred under such a plan may be paid.

3

Immediately before section 59G insert— “ Managed payment plans ”.

4

• (1) Section 109B (provision for securing payment by company of outstanding tax) is amended as follows.

• (2) In subsection (1), at the end insert “ , subject to subsection (5A). ”

• (3) In subsection (4)(b), at the end insert “ (which may include a proposal to enter into an exit charge payment plan in accordance with Schedule 3ZB). ”

• (4) After subsection (5) insert—

(5A) Condition D does not apply to the extent that payment of the tax is to be secured by the company entering into an exit charge payment plan in accordance with Schedule 3ZB.

5

• (1) Section 109E (liability of other persons for unpaid tax) is amended as follows.

• (2) After subsection (1) insert—

(1A) The reference in subsection (1)(b) to the time when tax becomes payable is a reference to— (a) in a case where an exit charge payment plan has been entered into in accordance with Schedule 3ZB in respect of the tax, the time when the tax becomes payable under the plan, and (b) in any other case, the time when the tax becomes payable in accordance with section 59D or 59E.

• (3) In subsection (2), for “the time when the amount of the tax is finally determined” substitute “ the relevant time ”.

• (4) After subsection (2) insert—

(2A) In subsection (2) the “relevant time” means— (a) in a case where an exit charge payment plan has been entered into in accordance with Schedule 3ZB in respect of the tax, the later of— (i) the first day after the period of 12 months beginning immediately after the migration accounting period (as defined in Part 1 or 2 of Schedule 3ZB, as the case may be), and (ii) the date on which the tax is payable under the plan, and (b) in any other case, the time when the amount of the tax is finally determined.

6

After Schedule 3ZA insert—