Finance Act 2013

(9) Section 554Z4A and section 554Z11A apply for the purposes of subsection (4) as for the purposes of section 554Z2 and section 554Z9(2) or 554Z10(2) respectively (reading references in sections 554Z4A and 554Z11A to “A” as references to “the relevant person”). (10) But those sections do not apply for the purposes of subsection (4) if the relevant person's temporary period of non-residence began before A died.

129

In Chapter 3 of Part 9 (United Kingdom pensions: general rules), after section 572 insert—

(572A) (1) This section applies if an individual is temporarily non-resident. (2) Any pension within subsection (3) is to be treated for the purposes of section 571 as if it accrued in the period of return. (3) A pension is within this subsection if— (a) section 569 applies to it, (b) it is in the form of a lump sum, (c) it accrued in the temporary period of non-residence, and (d) ignoring this section— (i) it is not chargeable to tax under this Chapter, but (ii) it would be so chargeable if the existence of any double taxation relief arrangements were disregarded. (4) Subsection (3)(d)(i) includes a case where the charge could be prevented by making a DTR claim, even if no claim is in fact made. (5) Nothing in any double taxation relief arrangements is to be read as preventing the individual from being chargeable to income tax in respect of any pension treated by virtue of this section as accruing in the period of return (or as preventing a charge to that tax from arising as a result). (6) Part 4 of Schedule 45 to FA 2013 (statutory residence test: anti-avoidance) explains— (a) when an individual is to be regarded as “temporarily non-resident”, and (b) what “the temporary period of non-residence” and “the period of return” mean. (7) In this section— - “double taxation relief arrangements” means arrangements that have effect under section 2(1) of TIOPA 2010; - “DTR claim” means a claim for relief under section 6 of that Act.

130

• (1) In Chapter 1 of Part 11 (pay as you earn: introduction), section 683 is amended as follows.

• (2) After subsection (3) insert—

(3ZA) PAYE employment income” for a tax year does not include any taxable specific income treated as paid or received in that tax year by section 394A or 554Z4A (temporary non-residents).

• (3) For subsection (3B) substitute—

(3B) PAYE pension income” for a tax year does not include any taxable pension income that is treated as accruing in that tax year by section 572A or 579CA (temporary non-residents).

New special rule: distributions to participators in close companies etc

131

Part 4 of ITTOIA 2005 (savings and investment income) is amended as follows.

132

In Chapter 1 (introduction), after section 368 insert—

(368A) (1) This section concerns provisions of this Part that are expressed to apply if an individual is “temporarily non-resident” (“TNR provisions”). (2) Part 4 of Schedule 45 to FA 2013 (statutory residence test: anti-avoidance) explains for the purposes of TNR provisions— (a) when an individual is to be regarded as “temporarily non-resident”, and (b) what the following terms mean— (i) “the temporary period of non-residence”, (ii) “the year of departure”, and (iii) “the period of return”. (3) A reference in TNR provisions to “the year of return” is to the tax year consisting of or including the period of return. (4) Nothing in any double taxation relief arrangements is to be read as preventing the individual from being chargeable to income tax by virtue of any TNR provisions (or as preventing a charge to that tax from arising as a result). (5) In this section and in TNR provisions, “double taxation relief arrangements” means arrangements that have effect under section 2(1) of TIOPA 2010.

133

In Chapter 3 (dividends etc from UK resident companies and tax credits etc in respect of certain distributions), after section 401B insert—

(401C) (1) This section applies if— (a) an individual is temporarily non-resident, (b) a relevant distribution is made or treated as made to the individual in the temporary period of non-residence, (c) the tax year in which it is made or treated as made (“the distribution year”) is a tax year for which the individual is UK resident, and (d) the amount of income tax charged on the distribution under this Chapter is less than it would have been if the existence of double taxation relief arrangements were disregarded. (2) Subsections (3) and (4) have effect in cases where the distribution year is not the year of return. (3) The total income (see Step 1 of the calculation in section 23 of ITA 2007) on which the individual is charged to income tax for the year of return is to be increased by an amount equal to the amount on which tax would be charged under this Chapter in respect of the distribution disregarding any double taxation relief arrangements. (4) But the notional UK tax on that distribution is to be allowed as a credit against the individual's liability to income tax for the year of return under Step 6 of the calculation in section 23. (5) If the distribution year is the year of return, the tax charged under this Chapter in respect of the relevant distribution is to be charged and assessed without regard to the existence of double taxation relief arrangements. (6) For the purposes of this section, a dividend or other distribution is a “relevant distribution” if— (a) it is a dividend or other distribution of a close company, and (b) it is made or treated as made to the individual because the individual was at a relevant time— (i) a material participator in the company, or (ii) an associate of a material participator in the company. (7) But a dividend or other distribution within subsection (6) in the form of a cash dividend is not a “relevant distribution” to the extent that the dividend is paid in respect of post-departure trade profits. (8) “Post-departure trade profits” are— (a) trade profits of the close company arising in an accounting period that begins after the start of the temporary period of non-residence, and (b) so much of any trade profits of the close company arising in an accounting period that straddles the start of that temporary period as is attributable (on a just and reasonable basis) to a time after the start of that temporary period. (9) The extent to which a dividend is paid in respect of post-departure trade profits is to be determined on a just and reasonable basis. (10) The “notional UK tax” on the relevant distribution is so much of the income tax paid by the individual for the distribution year as is attributable on a just and reasonable basis to the relevant distribution. (11) If section 393 applies, references in this section to a distribution being made to the individual are to a cash dividend being paid over to the individual. (12) In this section— - “associate” and “participator” have the same meanings as in Part 10 of CTA 2010 (see sections 448 and 454); - “material participator” means a participator who has a material interest in the company, as defined in section 457 of that Act; - “relevant time” means— 1. any time in the year of departure or, if the year of departure is a split year as respects the individual, the UK part of that year, or 2. any time in one or more of the 3 tax years preceding that year; - “trade profits of the close company” means the profits of any trade carried on by the close company, as calculated in accordance with Part 3 of CTA 2009 (trading income).

134

In Chapter 4 (dividends from non-UK resident companies), after section 408 insert—

(408A) (1) This section applies if an individual is temporarily non-resident. (2) Dividends within subsection (3) are to be treated for the purposes of this Chapter as if they were received by the individual, or as if the individual became entitled to them, in the period of return. (3) A dividend is within this subsection if— (a) the individual receives or becomes entitled to it in the temporary period of non-residence, (b) it is a dividend of a company that would be a close company if the company were UK resident, (c) the individual receives or becomes entitled to it by virtue of being at a relevant time— (i) a material participator in the company, or (ii) an associate of a material participator in the company, and (d) ignoring this section, the individual— (i) is not liable for tax under this Chapter in respect of the dividend, but (ii) would have been so liable if the individual had received the dividend, or become entitled to it, in the period of return. (4) For the purposes of subsection (3)— (a) “associate” and “participator” have the same meanings as in Part 10 of CTA 2010 (see sections 448 and 454), (b) a “material participator” is a participator who has a material interest in the company, as defined in section 457 of that Act, (c) “relevant time” means— (i) any time in the year of departure or, if the year of departure is a split year as respects the individual, the UK part of that year, or (ii) any time in one or more of the 3 tax years preceding that year, and (d) paragraph (d)(i) includes a case where the individual could be relieved of liability on the making of a claim under section 6 of TIOPA 2010 (double taxation relief), even if no claim is in fact made. (5) If section 809B, 809D or 809E of ITA 2007 (remittance basis) applies to the individual for the year of return, any dividend within subsection (3) that was remitted to the United Kingdom in the temporary period of non-residence is to be treated as remitted to the United Kingdom in the period of return. (6) This section does not apply to a dividend within subsection (3) to the extent that it is paid in respect of post-departure trade profits. (7) “Post-departure trade profits” are— (a) trade profits of the company arising in an accounting period that begins after the start of the temporary period of non-residence, and (b) so much of any trade profits of the company arising in an accounting period that straddles the start of that temporary period as is attributable (on a just and reasonable basis) to a time after the start of that temporary period. (8) The extent to which a dividend is paid in respect of post-departure trade profits is to be determined on a just and reasonable basis. (9) If section 406 or 407 applies, references in this section to a dividend being received by the individual are to a cash dividend being paid over to the individual or (as the case may be) a dividend being treated as paid to the individual. (10) In this section— - “remitted to the United Kingdom” has the meaning given in Chapter A1 of Part 14 of ITA 2007; - “trade profits of the company” means the profits of any trade carried on by the company, as they would be calculated in accordance with Part 3 of CTA 2009 (trading income) if the company were UK resident.

135

In Chapter 5 (stock dividends from UK resident companies), after section 413 insert—

(413A) (1) This section applies if— (a) an individual is temporarily non-resident, (b) relevant stock dividend income is treated under this Chapter as arising to the individual in the temporary period of non-residence, (c) the tax year in which it is treated as arising (“the arising year”) is a tax year for which the individual is UK resident, and (d) the amount of income tax charged on the relevant stock dividend income under this Chapter is less than it would have been if the existence of double taxation relief arrangements were disregarded. (2) Subsections (3) and (4) have effect in cases where the arising year is not the year of return. (3) The total income (see Step 1 of the calculation in section 23 of ITA 2007) on which the individual is charged to income tax for the year of return is to be increased by an amount equal to the amount on which tax would be charged under this Chapter in respect of the relevant stock dividend income disregarding any double taxation relief arrangements. (4) But the notional UK tax on that relevant stock dividend income is to be allowed as a credit against the individual's liability to income tax for the year of return under Step 6 of the calculation in section 23. (5) If the arising year is the year of return, the tax charged under this Chapter in respect of the relevant stock dividend income is to be charged and assessed without regard to the existence of double taxation relief arrangements. (6) Stock dividend income is “relevant stock dividend income” if— (a) the UK resident company that issues the share capital or bonus share capital is a close company, and (b) the individual is beneficially entitled to that share capital or bonus share capital by virtue of being at a relevant time— (i) a material participator in the company, or (ii) an associate of a material participator in the company. (7) But stock dividend income within subsection (6) is not “relevant stock dividend income” to the extent that the share capital or bonus share capital is issued in respect of post-departure trade profits. (8) “Post-departure trade profits” are— (a) trade profits of the close company arising in an accounting period that begins after the start of the temporary period of non-residence, and (b) so much of any trade profits of the close company arising in an accounting period that straddles the start of that temporary period as is attributable (on a just and reasonable basis) to a time after the start of that temporary period. (9) The extent to which share capital or bonus share capital is issued in respect of post-departure trade profits is to be determined on a just and reasonable basis. (10) The “notional UK tax” on the relevant stock dividend income is so much of the income tax paid by the individual for the arising year as is attributable on a just and reasonable basis to that income. (11) In this section— - “associate” and “participator” have the same meanings as in Part 10 of CTA 2010 (see sections 448 and 454); - “material participator” means a participator who has a material interest in the company, as defined in section 457 of that Act; - “relevant time” means— 1. any time in the year of departure or, if the year of departure is a split year as respects the individual, the UK part of that year, or 2. any time in one or more of the 3 tax years preceding that year; - “trade profits of the close company” means the profits of any trade carried on by the close company, as calculated in accordance with Part 3 of CTA 2009 (trading income).

136

In Chapter 6 (release of loan to participator in close company), after section 420 insert—

(420A) (1) This section applies if an individual is temporarily non-resident. (2) Debts within subsection (3) are to be treated for the purposes of this Chapter as if they had been released or written off in the period of return. (3) A debt is within this subsection if— (a) it is the debt, or a part of the debt, in respect of a loan or advance made by a company to the individual, (b) it is released or written off in the temporary period of non-residence, and (c) ignoring this section, the individual— (i) is not liable for tax under this Chapter in respect of the release or write-off, but (ii) would have been so liable, had the release or write-off taken place in the period of return. (4) Subsection (3)(c)(i) includes a case where the individual could be relieved of liability on the making of a claim under section 6 of TIOPA 2010 (double taxation relief), even if no claim is in fact made.

137

In Chapter 8 of Part 5 of that Act (income not otherwise charged), after section 689 insert—

(689A) (1) This section applies if an individual is temporarily non-resident. (2) Distributions within subsection (3) are to be treated for the purposes of this Chapter as if they had been received by the individual, or as if the individual had become entitled to them, in the period of return. (3) A distribution is within this subsection if— (a) the individual receives or becomes entitled to it in the temporary period of non-residence, (b) it is a distribution of a company that is a close company or that would be a close company if the company were UK resident, (c) the individual receives or becomes entitled to the distribution by virtue of being at a relevant time— (i) a material participator in the company, or (ii) an associate of a material participator in the company, and (d) ignoring this section, the individual— (i) is not liable for tax under this Chapter in respect of the distribution, but (ii) would have been so liable if the individual had received the distribution, or become entitled to it, in the period of return. (4) For the purposes of subsection (3)— (a) “associate” and “participator” have the same meanings as in Part 10 of CTA 2010 (see sections 448 and 454), (b) a “material participator” is a participator who has a material interest in the company, as defined in section 457 of that Act, (c) “relevant time” means— (i) any time in the year of departure or, if the year of departure is a split year as respects the individual, the UK part of that year, or (ii) any time in one or more of the 3 tax years preceding that year, and (d) paragraph (d)(i) includes a case where the individual could be relieved of liability on the making of a claim under section 6 of TIOPA 2010 (double taxation relief), even if no claim is in fact made. (5) If section 809B, 809D or 809E of ITA 2007 (remittance basis) applies to the individual for the year of return, any distribution within subsection (3) that is relevant foreign income and is remitted to the United Kingdom in the temporary period of non-residence is to be treated as remitted to the United Kingdom in the period of return. (6) In this section, “remitted to the United Kingdom” has the meaning given in Chapter A1 of Part 14 of ITA 2007.

138

In Chapter 1 of Part 14 of ITA 2007 (limits on liability to income tax of non-UK residents), after section 812 insert—

(812A) (1) This section applies if— (a) an individual is temporarily non-resident, (b) the individual's liability to income tax for a tax year is limited under section 811, (c) that tax year (“the non-resident year”) falls within the temporary period of non-residence, and (d) the individual's income for that tax year includes relevant investment income. (2) The total income (see Step 1 of the calculation in section 23) on which the individual is charged to income tax for the year of return is to be increased by an amount equal to the amount of that relevant investment income. (3) But the notional UK tax on that relevant investment income is to be allowed as a credit against the individual's liability to income tax for the year of return under Step 6 of the calculation in section 23. (4) Income is “relevant investment income” if— (a) it is chargeable under Chapter 3 or 5 of Part 4 of ITTOIA 2005 (dividends etc from UK resident companies and stock dividends from UK resident companies), (b) the distributing company is a close company, and (c) the income arises or is treated as arising to the individual because the individual was at a relevant time— (i) a material participator in that company, or (ii) an associate of a material participator in the company. (5) But income within subsection (4) in the form of a cash or stock dividend is not “relevant investment income” to the extent that the dividend is paid, or the share capital is issued, in respect of post-departure trade profits. (6) “Post-departure trade profits” are— (a) trade profits of the distributing company arising in an accounting period that begins after the start of the temporary period of non-residence, and (b) so much of any trade profits of the distributing company arising in an accounting period that straddles the start of that temporary period as is attributable (on a just and reasonable basis) to a time after the start of that temporary period. (7) The “notional UK tax” on relevant investment income is— (a) the total of any sums in respect of that income that were included within amount A in determining the limit under section 811, less (b) any credit for foreign tax paid in respect of that income that was allowed under Chapter 2 of Part 2 of TIOPA 2010 against the individual's liability to income tax for the non-resident year. (8) The following matters are to be determined on a just and reasonable basis— (a) the extent to which a dividend is paid, or share capital is issued, in respect of post-departure trade profits, and (b) the extent to which a sum included within amount A is a sum in respect of relevant investment income. (9) Nothing in any double taxation arrangements is to be read as preventing the individual from being chargeable to income tax by virtue of this section (or as preventing a charge to that tax from arising as a result). (10) Part 4 of Schedule 45 to FA 2013 (statutory residence test: anti-avoidance) explains— (a) when an individual is to be regarded as “temporarily non-resident”, and (b) what “the temporary period of non-residence”, “the year of departure” and “the period of return” mean. (11) In this section— - “associate” and “participator” have the same meanings as in Part 10 of CTA 2010 (see sections 448 and 454); - “the distributing company” means the UK resident company mentioned in section 383(1) or, as the case may be, 410(1) of ITTOIA 2005; - “material participator” means a participator who has a material interest in the company, as defined in section 457 of CTA 2010; - “relevant time” means— 1. any time in the year of departure or, if the year of departure is a split year as respects the individual, the UK part of that year, or 2. any time in one or more of the 3 tax years preceding that year; - “trade profits of the distributing company” means the profits of any trade carried on by the distributing company, as calculated in accordance with Part 3 of CTA 2009 (trading income); - “year of return” means the tax year consisting of or including the period of return.

New special rule: chargeable event gains

139

Chapter 9 of Part 4 of ITTOIA 2005 (gains from contracts for life insurance etc) is amended as follows.

140

After section 465A insert—

(465B) (1) This section applies if an individual is temporarily non-resident. (2) The individual is liable for tax under this Chapter for the year of return in respect of any gain that meets the conditions in subsection (3). (3) The conditions are— (a) the gain arose in the temporary period of non-residence, (b) it arose from a policy issued in respect of an insurance made, or from a contract made, before the start of that period, (c) the chargeable event giving rise to it was neither a death nor a chargeable event treated as occurring under section 525(2), (d) no-one is liable under section 466 or 467 in respect of the gain, (e) no-one is liable by virtue of section 468 for either the year of return or an earlier tax year as a result of the gain, and (f) the individual would have been liable under section 465 in respect of the gain, applying the assumptions in subsection (4). (4) The assumptions are— (a) the individual was UK resident for the tax year in which the gain arose, and (b) that tax year was not a split year as respects the individual. (5) If the individual is liable by virtue of subsection (2) in respect of a gain— (a) the amount of the gain in respect of which he or she is liable is the amount on which tax would have been charged under this Chapter applying the assumptions in subsection (4), but (b) in determining that amount, section 528 must be applied ignoring those assumptions. (6) That amount is treated as income of the individual for the year of return. (7) If the gain arises from a policy or contract treated under section 473A as a single policy or contract, the date, for the purposes of subsection (3)(b), on which the insurance or contract is made is the date on which the first insurance is made in respect of which the connected policies were issued or, as the case may be, the date on which the first of the connected contracts is made. (8) This section does not apply to a gain if— (a) in relation to the policy or contract from which the gain arises, a terminal event occurs in the temporary period of non-residence or in the period of return, (b) the chargeable event giving rise to the gain occurred before that terminal event, (c) the chargeable event giving rise to the gain is one that is treated as occurring under section 509(1) as a result of the application of section 498(1)(a), (d) section 498(1)(a) applies other than by virtue of section 500, and (e) a person (whether or not the individual) is liable for tax under this Chapter (including by virtue of this section) in respect of any gain resulting from the terminal event. (9) Nothing in any double taxation relief arrangements is to be read as preventing the individual from being liable for tax under this Chapter in respect of any gain in respect of which the individual is liable for tax by virtue of subsection (2) (or as preventing a charge to tax on that gain from arising under this Chapter). (10) Part 4 of Schedule 45 to FA 2013 (statutory residence test: anti-avoidance) explains— (a) when an individual is to be regarded as “temporarily non-resident”, and (b) what “the temporary period of non-residence” and “the period of return” mean. (11) In this section— terminal event” means an event mentioned in section 499(3); “year of return” means the tax year that consists of or includes the period of return.

141

In section 468 (non-UK resident trustees and foreign institutions), after subsection (6) insert—

(7) This section does not apply if someone is liable under section 465B in respect of the gain.

142

In section 514 (chargeable events where transaction-related calculations show gains), after subsection (4) insert—

(4A) Subsection (3)(b) includes a case where a person would be liable to tax on the gain under section 465B for the tax year in which the transaction occurs (because the transaction occurs in the year of return, as defined in that section).

143

In section 541 (calculation of deficiencies), in subsection (4)(b), after “that section” insert “ or formed part of the total income of that individual by virtue of section 465B for the tax year mentioned in section 539(1) ”.

144

In section 552 of ICTA (information: duties of insurers), in subsection (13), for “section 541A” substitute “ section 465B or 541A ”.

PART 5 — Miscellaneous

Interpretation

145

In this Schedule—

• “corporation tax” includes any amount assessable or chargeable as if it were corporation tax;

• “country” includes a state or territory;

• “cross-border trip” is defined in paragraph 30;

• “double taxation arrangements” means arrangements that have effect under section 2(1) of TIOPA 2010;

• “employment”—has the meaning given in section 4 of ITEPA 2003, andincludes an office within the meaning of section 5(3) of that Act;

• “enactment” means an enactment whenever passed (including this Act) and includes—an Act of the Scottish Parliament,a Measure or Act of the National Assembly for Wales,any Northern Ireland legislation as defined by section 24(5) of the Interpretation Act 1978, andany Orders in Council, orders, rules, regulations, schemes warrants, byelaws and other instruments made under an enactment (including anything mentioned in paragraphs (a) to (c) of this definition);

• “home” is to be construed in accordance with paragraph 25;

• “individual” means an individual acting in any capacity (including as trustee or personal representative);

• “overseas” means anywhere outside the UK;

• “parenting leave” means maternity leave, paternity leave, adoption leave, parental leave , parental bereavement leave or neonatal care leave (whether statutory or otherwise);

• “relevant job on board a vehicle, aircraft or ship” is defined in paragraph 30;

• “ship” includes any kind of vessel (including a hovercraft);

• “significant break from overseas work” is defined in paragraph 29;

• “significant break from UK work” is defined in paragraph 29;

• “split year”, as respects an individual, means a tax year that is, as respects that individual, a split year within the meaning of Part 3 of this Schedule;

• “trade” also includes—a profession or vocation,anything that is treated as a trade for income tax purposes, andthe commercial occupation of woodlands (within the meaning of section 11(2) of ITTOIA 2005);

• “work” is defined in paragraph 26;

• “UK” means the United Kingdom, including the territorial sea of the United Kingdom;

• “UK tie” is defined in paragraph 31;

• “whole month” means the whole of January, the whole of February and so on, except that the period from the start of a tax year to the end of April is to count as a whole month.

146

In relation to an individual who carries on a trade—

• (a) a reference in this Schedule to annual leave or parenting leave is to reasonable amounts of time off from work for the same purposes as the purposes for which annual leave or parenting leave is taken, and

• (b) what are “reasonable amounts” is to be assessed having regard to the annual leave or parenting leave to which an employee might reasonably expect to be entitled if doing similar work.

147

A reference in this Schedule to a number of days being less than a specified number includes a case where the number of days is zero.

Consequential amendments

148

• (1) TCGA 1992 is amended as follows.

• (2) Omit section 9.

• (3) In section 288 (interpretation)—

• (a) in subsection (1), insert the following definition at the appropriate place—

• “resident” means resident in accordance with the statutory residence test in Part 1 of Schedule 45 to the Finance Act 2013;

, and

• (b) in the Table in subsection (8), omit the entry for the expressions “resident” and “ordinarily resident”.

149

In section 27 of ITEPA 2003 (UK-based earnings for year when employee not UK resident), in subsection (1), for “in which” substitute “ for which ”.

150

In section 465 of ITTOIA 2005 (gains from contracts for life insurance etc: liability of individuals), in subsection (1), for “in the tax year” substitute “ for the tax year ”.

151

• (1) Chapter 4 of Part 2 of FA 2005 (trusts with vulnerable beneficiary) is amended as follows.

• (2) In section 28 (vulnerable person's liability: VQTI), for subsection (4) substitute—

(4) Where the vulnerable person is non-UK resident for the tax year, his or her income tax liability for the purposes of determining TLV1 and TLV2 is to be computed in accordance with the Income Tax Acts on the assumption that— (a) he or she is UK resident for the tax year, (b) that year is not, as respects him or her, a split year within the meaning of Part 3 of Schedule 45 to FA 2013, and (c) he or she is domiciled in the United Kingdom throughout that year.

• (3) In section 30 (qualifying trusts gains: special capital gains tax treatment)—

• (a) in subsection (2)(a) and (b), for “during” substitute “ for ”, and

• (b) omit subsection (5).

• (4) In section 31 (UK resident vulnerable persons: amount of relief), in subsection (1), for “during” substitute “ for ”.

• (5) In section 32 (non-UK resident vulnerable persons: amount of relief), in subsection (1), for “during” substitute “ for ”.

• (6) In section 41—

• (a) in subsection (1), insert the following definitions in the appropriate places—

• “non-UK resident” means not resident in the United Kingdom in accordance with the statutory residence test in Part 1 of Schedule 45 to FA 2013,

, and

“UK resident” means resident in the United Kingdom in accordance with the statutory residence test in Part 1 of Schedule 45 to FA 2013.

, and

• (b) omit subsection (2).

152

• (1) ITA 2007 is amended as follows.

• (2) In section 809B (claim for remittance basis to apply), in subsection (1)(a), for “in that year” substitute “ for that year ”.

• (3) In section 809D (application of remittance basis without claim where unremitted foreign income and gains under £2,000), in subsection (1)(a), for “in that year” substitute “ for that year ”.

• (4) In section 809E (application of remittance basis without claim: other cases), in subsection (1)(a), for “in that year” substitute “ for that year ”.

• (5) In section 810 (limits on liability to income tax of non-UK residents: overview of Chapter), after subsection (3) insert—

(4) In relation to an individual— (a) a reference in this Chapter to a non-UK resident's liability to income tax is a reference to the liability of someone who is non-UK resident for the tax year for which the liability arises, and (b) accordingly, enactments under which income arising to a UK resident in the overseas part of a split year is treated as arising to a non-UK resident are of no relevance to this Chapter.

• (6) Omit sections 829 to 832.

Commencement

153

• (1) Parts 1 and 2 of this Schedule have effect for determining whether individuals are resident or not resident in the UK for the tax year 2013-14 or any subsequent tax year.

• (2) Part 3 of this Schedule has effect in calculating an individual's liability to income tax or capital gains tax for the tax year 2013-14 or any subsequent tax year.

• (3) Part 4 of this Schedule has effect if the year of departure (as defined in that Part) is the tax year 2013-14 or a subsequent tax year.

Transitional and saving provision

154

• (1) This paragraph applies if—

• (a) year X or, in Part 3 of this Schedule, the relevant year is the tax year 2013-14, 2014-15, 2015-16, 2016-17 or 2017-18, and

• (b) it is necessary to determine under this Schedule whether an individual was resident or not resident in the UK for a tax year before the tax year 2013-14 (a “pre-commencement tax year”).

• (2) The question under this Schedule 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).

• (3) But an individual may by notice in writing to Her Majesty's Revenue and Customs elect, as respects one or more pre-commencement tax years, for the question under this Schedule to be determined instead in accordance with the statutory residence test.

• (4) A notice under sub-paragraph (3)—

• (a) must be given no later than the first anniversary of the end of year X or, in a Part 3 case, the relevant year, and

• (b) is irrevocable.

• (5) Unless, in relation to a pre-commencement tax year, an election is made under sub-paragraph (3) as respects that year—

• (a) paragraph 10(b) of this Schedule has effect in relation to that year as if the words “by virtue of meeting the automatic residence test” were omitted,

• (b) paragraph 16 of this Schedule has effect in relation to that year as if—

• (i) in sub-paragraph (1)(b), the words “because P met the third automatic overseas test for each of those years” were omitted, and

• (ii) in sub-paragraph (2)(a), the words “because P met the third automatic overseas test for that year” were omitted, and

• (c) paragraph 49 of this Schedule has effect in relation to that year as if in sub-paragraph (2)(a) for the words from “because” to the end there were substituted “ in circumstances where the taxpayer was working overseas full-time for the whole of that year. ”

155

• (1) This paragraph applies if—

• (a) year X or, for Part 3 of this Schedule, the tax year for which an individual's liability to tax is being calculated is the tax year 2013-14 or a subsequent tax year, and

• (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