Legalize / United Kingdom / Public General Act

Finance Act 2013

Type Public General Act

Publication 2013-07-17

Last updated 2025-12-16

State In force

Department Statute Law Database

Source legislation.gov.uk

articles Not indexed

Reform history JSON API

Description of wine or made-wine	Rates of duty per hectolitre £
Wine or made-wine of a strength not exceeding 4 per cent	82.18
Wine or made-wine of a strength exceeding 4 per cent but not exceeding 5.5 per cent	113.01
Wine or made-wine of a strength exceeding 5.5 per cent but not exceeding 15 per cent and not being sparkling	266.72
Sparkling wine or sparkling made-wine of a strength exceeding 5.5 per cent but less than 8.5 per cent	258.23
Sparkling wine or sparkling made-wine of a strength of 8.5 per cent or of a strength exceeding 8.5 per cent but not exceeding 15 per cent	341.63
Wine or made-wine of a strength exceeding 15 per cent but not exceeding 22 per cent	355.59
Description of wine or made-wine	Rates of duty per litre of alcohol in wine or made-wine £
---	---
Wine or made-wine of a strength exceeding 22 per cent	28.22

(7) The amendments made by this section are treated as having come into force on 25 March 2013.

Tobacco

Rates of tobacco products duty

181

(1) For the table in Schedule 1 to TPDA 1979 substitute—

1. Cigarettes	An amount equal to 16.5 per cent of the retail price plus £176.22 per thousand cigarettes
2. Cigars	£219.82 per kilogram
3. Hand-rolling tobacco	£172.74 per kilogram
4. Other smoking tobacco and chewing tobacco	£96.64 per kilogram

(2) The amendment made by this section is treated as having come into force at 6 pm on 20 March 2013.

Meaning of “tobacco products”

182

(1) Section 1 of TPDA 1979 (tobacco products) is amended as follows.

(2) In subsection (1), omit “, but does not include herbal smoking products”.

(3) After that subsection insert—

(1A) But a product is not a tobacco product for the purposes of this Act if— (a) the product does not contain any tobacco, and (b) the Commissioners are satisfied that— (i) the product is of a description that is used for medical purposes, and (ii) the product is intended to be used exclusively for such purposes.

(4) In subsection (3), omit “but not including herbal smoking products”.

(5) Omit subsection (6).

(6) The amendments made by this section come into force on 1 January 2014.

Gambling

Rates of gaming duty

183

(1) In section 11(2) of FA 1997 (rates of gaming duty), for the table substitute—

Part of gross gaming yield	Rate
The first £2,242,500	15 per cent
The next £1,546,000	20 per cent
The next £2,707,500	30 per cent
The next £5,714,500	40 per cent
The remainder	50 per cent

(2) The amendment made by this section has effect in relation to accounting periods beginning on or after 1 April 2013.

Combined bingo

184

(1) Section 20A of BGDA 1981 (combined bingo) is amended as follows.

(2) In subsection (3) for the words from the beginning to “second promoter”)—” substitute “Where money representing such payments (so far as they constituted stakes hazarded in the combined bingo) is paid in an accounting period by one promoter of the bingo (“the first promoter”) to another (“the second promoter”), to the extent that the money is used (directly or indirectly) to provide bingo winnings for combined bingo promoted by the second promoter—”.

(3) Omit subsection (4).

(4) The amendments made by this section have effect in relation to accounting periods beginning on or after the day on which this Act is passed.

Air passenger duty

Air passenger duty: rates of duty from 1 April 2013

185

(1) Section 30 of FA 1994 (air passenger duty: rates of duty) is amended as follows.

(2) In subsection (3)—

(a) in paragraph (a) for “£65” substitute “ £67 ”, and

(b) in paragraph (b) for “£130” substitute “ £134 ”.

(3) In subsection (4)—

(a) in paragraph (a) for “£81” substitute “ £83 ”, and

(b) in paragraph (b) for “£162” substitute “ £166 ”.

(4) In subsection (4A)—

(a) in paragraph (a) for “£92” substitute “ £94 ”, and

(b) in paragraph (b) for “£184” substitute “ £188 ”.

(5) The amendments made by this section have effect in relation to the carriage of passengers beginning on or after 1 April 2013.

Air passenger duty: miscellaneous provision

186

(1) In section 38 of FA 1994 (accounting for and payment of duty) after subsection (2) insert—

(2A) Regulations may require a prescribed person to make, at prescribed times during a prescribed period, payments based on an estimate of what the person's liability will be for duty charged in the period. (2B) The estimate and the amounts of the payments are to be determined in accordance with provision made by the regulations. (2C) The payments are to be treated as being payments on account of the person's liability for duty charged in the period. (2D) The regulations must make provision for dealing with cases where this results in an overpayment of duty by providing for amounts— (a) to be repaid by the Commissioners, or (b) to be treated as having been paid on account of the person's liability for duty charged in other periods, or both.

(2) In Part 2 of Schedule 5A to FA 1994 (territories etc) at the appropriate place insert “ South Sudan ”.

(3) The amendment made by subsection (2) has effect in relation to the carriage of passengers beginning on or after 9 July 2011.

Vehicle excise duty

VED rates for light passenger vehicles, light goods vehicles, motorcycles etc

187

(1) Schedule 1 to VERA 1994 (annual rates of duty) is amended as follows.

(2) In paragraph 1 (general)—

(a) in sub-paragraph (2) (vehicle not covered elsewhere in Schedule otherwise than with engine cylinder capacity not exceeding 1,549cc), for “£220” substitute “ £225 ”, and

(b) in sub-paragraph (2A) (vehicle not covered elsewhere in Schedule with engine cylinder capacity not exceeding 1,549cc), for “£135” substitute “ £140 ”.

(3) In paragraph 1B (graduated rates of duty for light passenger vehicles)—

(a) for the tables substitute—

CO₂ emissions figure	CO₂ emissions figure	Rate	Rate
(1)	(2)	(3)	(4)
Exceeding	Not exceeding	Reduced rate	Standard rate
g/km	g/km	£	£
130	140	115	125
140	150	130	140
150	165	165	175
165	175	275	285
175	185	325	335
185	200	465	475
200	225	610	620
225	255	830	840
255		1055	1065
CO₂ emissions figure	CO₂ emissions figure	Rate	Rate
---	---	---	---
(1)	(2)	(3)	(4)
Exceeding	Not exceeding	Reduced rate	Standard rate
g/km	g/km	£	£
100	110	10	20
110	120	20	30
120	130	95	105
130	140	115	125
140	150	130	140
150	165	165	175
165	175	190	200
175	185	210	220
185	200	250	260
200	225	270	280
225	255	465	475
255		480	490

;

(b) in the sentence immediately following the tables, for paragraphs (a) and (b) substitute—

(a) in column (3), in the last two rows, “270” were substituted for “465” and “ 480 ”, and (b) in column (4), in the last two rows, “280” were substituted for “475” and “ 490 ”.

(4) In paragraph 1J (VED rates for light goods vehicles)—

(a) in paragraph (a), for “£215” substitute “ £220 ”, and

(b) in paragraph (b), for “£135” substitute “ £140 ”.

(5) In paragraph 2(1) (VED rates for motorcycles)—

(a) in paragraph (a), for “£16” substitute “ £17 ”,

(b) in paragraph (b), for “£36” substitute “ £37 ”,

(d) in paragraph (d), for “£76” substitute “ £78 ”.

(6) The amendments made by this section have effect in relation to licences taken out on or after 1 April 2013.

Not exhibiting licence: period of grace

188

(1) In section 33 of VERA 1994 (not exhibiting licence), omit subsections (1B) to (1D).

(2) After that section insert—

(33A) (1) A person is not guilty of an offence under subsection (1) or (1A) of section 33 by using or keeping a vehicle on a public road during any of the following periods. - First registration The period of 14 days beginning with the day on which the vehicle is first registered under this Act. - Change of keeper The period of 14 days beginning with the day on which a new licence or nil licence is issued for the vehicle because of a change in the person by whom the vehicle is being kept. - Renewal etc. The period of 14 days following the time when a licence or nil licence for or in respect of the vehicle, or a relevant declaration applying to the vehicle, ceases to be in force, but only if an application for a licence or nil licence for or in respect of the vehicle to run from that time has been received before that time. - Replacement The period beginning with the time when a licence or nil licence that is in force for or in respect of the vehicle is delivered to the Secretary of State with an application for a replacement licence, and ending with the time when the replacement licence is obtained. (2) For the purposes of this section— (a) there is a relevant declaration applying to a vehicle if the particulars and declaration required to be furnished and made by regulations under section 22(1D) have been furnished and made in relation to the vehicle in accordance with the regulations, and (b) the relevant declaration ceases to be in force if, after the particulars and declaration have been furnished and made the vehicle is used or kept on a public road (otherwise than under a trade licence).

(3) In consequence of the provision made by subsections (1) and (2) omit—

(a) section 147 of FA 2008, and

(b) in regulation 6 of the Road Vehicles (Registration and Licensing) Regulations 2002 (S.I. 2002/2742), paragraph (1) and, in paragraph (2), the words “Except where paragraph (1) applies,”.

Vehicles not kept or used on public road

189

(1) VERA 1994 is amended as follows.

(2) In section 7A (supplement payable on vehicle ceasing to be appropriately covered), in subsection (1A)(d) omit “within the immediately preceding period of 12 months”.

(3) In Schedule 2A (immobilisation, removal and disposal of vehicles), in paragraph 1(10)(b) omit “within the immediately preceding period of 12 months”.

Vehicle licences for disabled people

190

Schedule 37 makes provision about vehicle licences for disabled people.

Value added tax

Repayments of value added tax to health service bodies

191

(1) In section 41 of VATA 1994 (application to the Crown), in subsection (7), after “Board” insert “ and a clinical commissioning group, the Health and Social Care Information Centre, the National Health Service Commissioning Board and the National Institute for Health and Care Excellence ”.

(2) The amendment made by this section is treated as having come into force on 1 April 2013.

Valuation of certain supplies of fuel

192

Schedule 38 contains provision about the valuation of certain supplies of fuel for the purposes of value added tax.

Reduced rate for energy-saving materials

193

(1) Group 2 (installation of energy-saving materials) of Part 2 of Schedule 7A to VATA 1994 (reduced rate supplies of goods and services) is amended as follows.

(2) For items 1 and 2 substitute—

(1) Supplies of services of installing energy-saving materials in residential accommodation. (2) Supplies of energy-saving materials by a person who installs those materials in residential accommodation.

(3) Omit Note 3 (meaning of “use for a relevant charitable purpose”).

(4) The amendments made by this section have effect in relation to supplies made on or after 1 August 2013.

Stamp duty land tax

Pre-completion transactions: existing cases

194

(1) Section 45 of FA 2003 (contract and conveyance: effect of transfer of rights)—

(a) has effect subject to the amendment in subsection (2) below in relation to agreements for the grant or assignment of an option that are entered into during the period beginning with 21 March 2012 and ending immediately before the day on which this Act is passed, and

(b) has effect subject to the amendments in subsections (3) to (7) below in relation to transfers of rights (see subsection (1) of that section) entered into during that period.

(2) At the end of subsection (1A) insert “ or an agreement for the future grant or assignment of an option ”.

(3) In subsection (3), in the second sentence, after “except” insert “ in a case excluded by subsection (3A) or ”.

(4) After subsection (3) insert—

(3A) A case is excluded by this subsection from the second sentence of subsection (3) if— (a) the secondary contract is substantially performed at the same time as, and in connection with, the substantial performance or completion of the original contract but is not completed at that time (“the relevant time”), (b) the original purchaser or a person connected with the original purchaser is in possession of the whole, or substantially the whole, of the subject-matter of the transfer of rights at any time after the relevant time, and (c) having regard to all the circumstances, it would be reasonable to conclude that the obtaining of a tax advantage for the original purchaser was the main purpose, or one of the main purposes, of the original purchaser in entering into the transfer of rights. (3B) In subsection (3A)— - “possession” has the same meaning as in section 44(5)(a); - “tax advantage” means— 1. a relief from tax or increased relief from tax, 2. a repayment of tax or increased repayment of tax, or 3. the avoidance or reduction of a charge to tax. (3C) Nothing in subsection (3A) or (3B) affects the breadth of the application of sections 75A to 75C.

(5) In subsection (4), at the end insert “ except in a case excluded by subsection (4A) ”.

(6) After subsection (4) insert—

(4A) Subsection (3A) applies for the purposes of subsection (4) as if— (a) the reference to subsection (3) were a reference to subsection (4), (b) a reference to the original contract were a reference to the secondary contract arising from the earlier transfer of rights, (c) a reference to the original purchaser were a reference to the transferee under the earlier transfer of rights, and (d) a reference to the transfer of rights were a reference to the subsequent transfer of rights.

(7) In subsection (5)(b)—

(a) after “subsection (3) above” insert “ or in subsection (3A) above ”, and

(b) after “subsection (4)” insert “ or (4A) ”.

(8) Subsections (10) to (12) apply where—

(a) as a result of subsection (2) of this section, section 45 of FA 2003 does not apply in relation to a contract of the kind mentioned in subsection (1)(a) of that section (“the original contract”),

(b) the original contract was substantially performed or completed (or, in a case that would have fallen within subsection (5) of that section, substantially performed or completed so far as relating to the relevant part of the subject-matter of the original contract) at the same time as, and in connection with, the substantial performance or completion of an agreement for the grant or assignment of an option, and

(9) Subsections (10) to (12) also apply where—

(a) section 45 of FA 2003 applies in relation to the contract for a land transaction (“the original contract”),

(b) as a result of subsections (1) to (7) above, the substantial performance or completion of the original contract (or, in a case within subsection (5) of that section, its substantial performance or completion so far as relating to part of the subject-matter of the original contract) is not disregarded, and

(10) Section 76 of FA 2003 (duty to deliver land transaction return) is to be regarded as requiring the purchaser under the original contract to deliver a land transaction return relating to the land transaction not later than 30 September 2013.

(11) Accordingly, 30 September 2013 is for the purposes of Part 4 of FA 2003 the filing date for the land transaction return relating to the transaction.

(12) If the purchaser under the original contract (“P”) has delivered a land transaction return relating to the land transaction before the day on which this Act is passed, P must not later than 30 September 2013 give notice under paragraph 6 of Schedule 10 to FA 2003 amending the return, but this does not prevent P from making subsequent amendments within the time allowed by sub-paragraph (3) of that paragraph.

Pre-completion transactions

195

Schedule 39 contains provisions about certain transactions relating to a contract that is to be completed by a conveyance.

Relief from higher rate

196

Schedule 40 contains provisions about relief from the higher rate of stamp duty land tax.

Leases

197

Schedule 41 contains provision about stamp duty land tax in relation to leases.

Landfill tax

Standard rate of landfill tax

198

(1) Section 42 of FA 1996 (amount of landfill tax) is amended as follows.

(2) In subsection (1)(a) (standard rate), for “£72” substitute “ £80 ”.

(3) In subsection (2) (reduced rate) for “£72” substitute “ £80 ”.

(4) The amendments made by this section have effect in relation to disposals made (or treated as made) on or after 1 April 2014.

Climate change levy

Climate change levy: main rates

199

(1) In paragraph 42(1) of Schedule 6 to FA 2000 (climate change levy: amount payable by way of levy) for the table substitute—

Taxable commodity supplied	Rate at which levy payable if supply is not a reduced-rate supply or a supply for use in scrap metal recycling
Electricity	£0.00541 per kilowatt hour
Gas supplied by a gas utility or any gas supplied in a gaseous state that is of a kind supplied by a gas utility	£0.00188 per kilowatt hour
Any petroleum gas, or other gaseous hydrocarbon, supplied in a liquid state	£0.01210 per kilogram
Any other taxable commodity	£0.01476 per kilogram

(2) The amendment made by subsection (1) has effect in relation to supplies treated as taking place on or after 1 April 2014.

Climate change levy: supplies subject to carbon price support rates etc

200

Schedule 42 amends Schedule 6 to FA 2000 (climate change levy).

Insurance premium tax

Contracts that are not taxable

201

(1) In Schedule 7A to FA 1994 (IPT: contracts that are not taxable), paragraph 3 (contracts relating to motor vehicles for use by handicapped persons) is amended as follows.

(2) In sub-paragraph (2)(a)—

(a) after “disability living allowance” insert “ , or personal independence payment, ” and

(b) after “component” insert “ , or of an armed forces independence payment ”.

(3) In sub-paragraph (3), after “disability living allowance” insert “ , personal independence payment, armed forces independence payment ”.

(4) After sub-paragraph (4)(b) insert—

(ba) personal independence payment” means a personal independence payment under Part 4 of the Welfare Reform Act 2012 or the corresponding provision having effect in Northern Ireland; (bb) “armed forces independence payment” means an armed forces independence payment under a scheme established under section 1 of the Armed Forces (Pensions and Contributions) Act 2004;

(5) The amendments made by this section are treated as having come into force on 8 April 2013.

Bank levy

Bank levy: rates from 1 January 2013

202

(1) Schedule 19 to FA 2011 (bank levy) is amended as follows.

(2) In paragraph 6 (steps for determining the amount of the bank levy), in sub-paragraph (2)—

(a) for “0.044%” substitute “ 0.065% ”, and

(b) for “0.088%” substitute “ 0.130% ”.

(3) In paragraph 7 (special provision for chargeable periods falling wholly or partly before 1 January 2013), in sub-paragraph (2) (as substituted by paragraph 6 of Schedule 34 to FA 2012), in the table in the substituted Step 7—

(a) in the second column for “0.0525%” substitute “ 0.065% ”, and

(b) in the third column for “0.105%” substitute “ 0.130% ”.

(4) In Schedule 34 to FA 2012 (bank levy)—

(a) omit paragraph 5 (which substituted new rates from 1 January 2013), and

(b) in paragraph 7 for “paragraphs 5 and” substitute “ paragraph ”.

(5) The amendments made by subsections (2) to (4) are treated as having come into force on 1 January 2013 (and accordingly the paragraph repealed by subsection (4) is treated as never having come into force).

(6) Subsections (7) to (13) apply where—

(a) an amount of the bank levy is treated as if it were an amount of corporation tax chargeable on an entity (“E”) for an accounting period of E,

(b) the chargeable period in respect of which the amount of the bank levy is charged falls (or partly falls) on or after 1 January 2013, and

(c) under the Instalment Payment Regulations, one or more instalment payments, in respect of the total liability of E for the accounting period, were treated as becoming due and payable before the commencement date (“pre-commencement instalment payments”).

(7) Subsections (1) to (5) are to be ignored for the purpose of determining the amount of any pre-commencement instalment payment.

(8) If there is at least one instalment payment, in respect of the total liability of E for the accounting period, which under the Instalment Payment Regulations is treated as becoming due and payable on or after the commencement date (“post-commencement instalment payments”), the amount of that instalment payment, or the first of them, is to be increased by the adjustment amount.

(9) If there are no post-commencement instalment payments, a further instalment payment, in respect of the total liability of E for the accounting period, of an amount equal to the adjustment amount is to be treated as becoming due and payable at the end of the period of 30 days beginning with the commencement date.

(10) “The adjustment amount” is the difference between—

(a) the aggregate amount of the pre-commencement instalments determined in accordance with subsection (7), and

(b) the aggregate amount of those instalment payments determined ignoring subsection (7) (and so taking account of subsections (1) to (5)).

(11) In the Instalment Payment Regulations—

(a) in regulations 6(1)(a), 7(2), 8(1)(a) and (2)(a), 9(5), 10(1), 11(1) and 13, references to regulation 4A, 4B, 4C, 4D, 5, 5A or 5B of those Regulations are to be read as including a reference to subsections (6) to (10) (and in regulation 7(2) “the regulation in question”, and in regulation 8(2) “that regulation”, are to be read accordingly), and

(b) in regulation 9(3), the reference to those Regulations is to be read as including a reference to subsections (6) to (10).

(12) In section 59D of TMA 1970 (general rule as to when corporation tax is due and payable), in subsection (5), the reference to section 59E is to be read as including a reference to subsections (6) to (11).

(13) In this section—

“the chargeable period” is to be construed in accordance with paragraph 4 or (as the case may be) 5 of Schedule 19 to FA 2011;

“the commencement date” means the day on which this Act is passed;

“the Instalment Payment Regulations” means the Corporation Tax (Instalment Payments) Regulations 1998 (S.I. 1998/3175);

and references to the total liability of E for an accounting period are to be construed in accordance with regulation 2(3) of the Instalment Payment Regulations.

Bank levy: rates from 1 January 2014

203

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

No deductions for UK or foreign bank levies

204

(1) Schedule 19 to FA 2011 (the bank levy) is amended as follows.

(2) In paragraph 46 (bank levy to be ignored for purposes of corporation tax and income tax), in paragraph (b), after “paid” insert “ (directly or indirectly) ”.

(3) In Part 7 (double taxation relief), after paragraph 69 insert—

(69A) (1) In calculating profits or losses for the purposes of income tax or corporation tax— (a) no deduction is allowed in respect of any tax which is imposed by the law of a territory outside the United Kingdom and corresponds to the bank levy, and (b) no account is to be taken of any amount which is paid (directly or indirectly) by a member of a group to another member for the purposes of meeting or reimbursing the cost of such a tax charged in relation to the group. (2) Paragraph 66(3) applies for the purposes of sub-paragraph (1) as it applies for the purposes of paragraph 66(2).

(4) Accordingly—

(a) in paragraph 3, after “double taxation relief” insert “ and with the deduction of foreign levies for the purposes of corporation tax and income tax ”, and

(b) in the heading for Part 7, after “RELIEF” insert “ ETC ”

(5) The amendments made by this section have effect in relation to any period of account beginning on or after 1 January 2013.

(6) The amendments made by subsections (3) and (4) also have effect in relation to any period of account beginning before that date, but only if, and to the extent that, the tax is the subject of a claim for relief under paragraph 66 or 67 of Schedule 19 to FA 2011 (bank levy: double taxation relief) made on or after 5 December 2012.

(7) For the purposes of subsections (5) and (6), a period of account beginning before, and ending on or after 1 January 2013 is to be treated as if so much of the period as falls before that date, and so much of the period as falls on or after that date, were separate periods of account.

High quality liquid assets

205

(1) In paragraph 70 of Schedule 19 to FA 2011 (bank levy: definitions), in sub-paragraph (1), in the definition of “high quality liquid asset” for “section 12.7.2(1) to (4)” substitute “section 12.7 (assets that are eligible for inclusion in a firm's regulatory liquid assets buffer)'.

(2) The amendment made by this section has effect in relation to chargeable periods ending on or after 1 January 2011, and in relation to those chargeable periods the amendment is to be treated as always having had effect.

PART 5 — General anti-abuse rule

General anti-abuse rule

206

(1) This Part has effect for the purpose of counteracting tax advantages arising from tax arrangements that are abusive.

(2) The rules of this Part are collectively to be known as “the general anti-abuse rule”.

(3) The general anti-abuse rule applies to the following taxes—

(a) income tax,

(b) corporation tax, including any amount chargeable as if it were corporation tax or treated as if it were corporation tax,

(d) petroleum revenue tax,

(da) diverted profits tax,

(db) apprenticeship levy,

(e) inheritance tax,

(f) stamp duty land tax, and

(g) annual tax on enveloped dwellings.

(h) multinational top-up tax.

(i) domestic top-up tax.

Meaning of “tax arrangements” and “abusive”

207

(1) Arrangements are “tax arrangements” if, having regard to all the circumstances, it would be reasonable to conclude that the obtaining of a tax advantage was the main purpose, or one of the main purposes, of the arrangements.

(2) Tax arrangements are “abusive” if they are arrangements the entering into or carrying out of which cannot reasonably be regarded as a reasonable course of action in relation to the relevant tax provisions, having regard to all the circumstances including—

(a) whether the substantive results of the arrangements are consistent with any principles on which those provisions are based (whether express or implied) and the policy objectives of those provisions,

(b) whether the means of achieving those results involves one or more contrived or abnormal steps, and

(3) Where the tax arrangements form part of any other arrangements regard must also be had to those other arrangements.

(4) Each of the following is an example of something which might indicate that tax arrangements are abusive—

(a) the arrangements result in an amount of income, profits or gains for tax purposes that is significantly less than the amount for economic purposes,

(b) the arrangements result in deductions or losses of an amount for tax purposes that is significantly greater than the amount for economic purposes, and

(c) the arrangements result in a claim for the repayment or crediting of tax (including foreign tax) that has not been, and is unlikely to be, paid,

but in each case only if it is reasonable to assume that such a result was not the anticipated result when the relevant tax provisions were enacted.

(5) The fact that tax arrangements accord with established practice, and HMRC had, at the time the arrangements were entered into, indicated its acceptance of that practice, is an example of something which might indicate that the arrangements are not abusive.

(6) The examples given in subsections (4) and (5) are not exhaustive.

Meaning of “tax advantage”

208

A “tax advantage” includes—

(a) relief or increased relief from tax,

(b) repayment or increased repayment of tax,

(d) avoidance of a possible assessment to tax,

(e) deferral of a payment of tax or advancement of a repayment of tax, and

(f) avoidance of an obligation to deduct or account for tax.

Counteracting the tax advantages

209

(1) If there are tax arrangements that are abusive, the tax advantages that would (ignoring this Part) arise from the arrangements are to be counteracted by the making of adjustments.

(2) The adjustments required to be made to counteract the tax advantages are such as are just and reasonable.

(3) The adjustments may be made in respect of the tax in question or any other tax to which the general anti-abuse rule applies.

(4) The adjustments that may be made include those that impose or increase a liability to tax in any case where (ignoring this Part) there would be no liability or a smaller liability, and tax is to be charged in accordance with any such adjustment.

(5) Any adjustments required to be made under this section (whether by an officer of Revenue and Customs or anyone else) may be made by way of an assessment, the modification of an assessment, amendment or disallowance of a claim, or otherwise.

(6) But—

(a) the effect of adjustments made by an officer of Revenue and Customs by virtue of this section is suspended until the procedural requirements of Schedule 43, 43A or 43B have been complied with, and

(b) the power to make adjustments by virtue of this section is subject to any time limit imposed by or under any enactment other than this Part.

The provision made by this subsection needs to be read with sections 209AA to 209AC and has no effect on adjustments so far as made otherwise than by virtue of this section.

(6A) The procedural requirements mentioned in subsection (6)(a) include any procedural requirements which apply under or by virtue of Schedule 43D (which makes provision in relation to partnerships).

(7) Any adjustments made under this section have effect for all purposes.

(8) Where a matter is referred to the GAAR Advisory Panel under paragraph 5 or 6 of Schedule 43 in relation to any tax arrangements, no GAAR-related adjustments may be made in the period (“the closed period”) that—

(a) begins with the 31st day after the end of the 45 day period mentioned in paragraph 4(1) of Schedule 43, and

(b) ends immediately before the day on which the notice under paragraph 12 of Schedule 43 is given in relation to the tax arrangements.

(9) Where a pooling notice or notice of binding has been given in relation to any tax arrangements, no GAAR-related adjustments may be made in the period (“the closed period”) that—

(a) begins with the 31st day after the day on which the notice is given, and

(b) ends immediately before the day on which a notice under paragraph 8(2) or 9(2) of Schedule 43A, or a notice under paragraph 8(2) of Schedule 43B, is given in relation to the tax arrangements (as the case may be).

(10) In this section “GAAR-related adjustments” means—

(a) for the purposes of subsection (8), adjustments which give effect (wholly or in part) to the proposed counteraction set out in the notice under paragraph 3 of Schedule 43 or paragraph 5 of Schedule 43D.;

(b) for the purposes of subsection (9), adjustments which give effect (wholly or partly) to the proposed counteraction set out in the notice of pooling or binding (as the case may be).

Consequential relieving adjustments

210

(1) This section applies where—

(a) the counteraction of a tax advantage under section 209 is final, and

(b) if the case is not one in which notice of the counteraction was given under paragraph 12 of Schedule 43, paragraph 8 or 9 of Schedule 43A or paragraph 8 of Schedule 43B, HMRC have been notified of the counteraction ....

(2) A person has 12 months, beginning with the day on which the counteraction becomes final, to make a claim for one or more consequential adjustments to be made in respect of any tax to which the general anti-abuse rule applies.

(3) On a claim under this section, an officer of Revenue and Customs must make such of the consequential adjustments claimed (if any) as are just and reasonable.

(4) Consequential adjustments—

(a) may be made in respect of any period, and

(b) may affect any person (whether or not a party to the tax arrangements).

(5) But nothing in this section requires or permits an officer to make a consequential adjustment the effect of which is to increase a person's liability to any tax.

(6) For the purposes of this section—

(a) if the claim relates to income tax or capital gains tax, Schedule 1A to TMA 1970 applies to it;

(b) if the claim relates to corporation tax, Schedule 1A to TMA 1970 (and not Schedule 18 to FA 1998) applies to it;

(c) if the claim relates to petroleum revenue tax, Schedule 1A to TMA 1970 applies to it, but as if the reference in paragraph 2A(4) of that Schedule to a year of assessment included a reference to a chargeable period within the meaning of OTA 1975 (see section 1(3) and (4) of that Act);

(d) if the claim relates to inheritance tax it must be made in writing to HMRC and section 221 of IHTA 1984 applies as if the claim were a claim under that Act;

(e) if the claim relates to stamp duty land tax or annual tax on enveloped dwellings, Schedule 11A to FA 2003 applies to it as if it were a claim to which paragraph 1 of that Schedule applies.

(7) Where an officer of Revenue and Customs makes a consequential adjustment under this section, the officer must give the person who made the claim written notice describing the adjustment which has been made.

(8) For the purposes of this section the counteraction of a tax advantage is final when the adjustments made to effect the counteraction, and any amounts arising as a result of those adjustments, can no longer be varied, on appeal or otherwise.

(9) Any adjustments required to be made under this section may be made—

(a) by way of an assessment, the modification of an assessment, the amendment of a claim, or otherwise, and

(b) despite any time limit imposed by or under any enactment other than this Part.

(10) For the purposes of subsection (1)(b), HMRC must be notified—

(a) in a case where Schedule 43D applies, by the responsible partner (within the meaning of that Schedule), and

(b) in any other case, by the person to whom the tax advantage would have arisen.

Proceedings before a court or tribunal

211

(1) In proceedings before a court or tribunal in connection with the general anti-abuse rule, HMRC must show—

(a) that there are tax arrangements that are abusive, and

(b) that the adjustments made to counteract the tax advantages arising from the arrangements are just and reasonable.

(2) In determining any issue in connection with the general anti-abuse rule, a court or tribunal must take into account—

(a) HMRC's guidance about the general anti-abuse rule that was approved by the GAAR Advisory Panel at the time the tax arrangements were entered into, and

(b) any opinion of the GAAR Advisory Panel given—

(i) under paragraph 11 of Schedule 43 about the arrangements or any tax arrangements which are, as a result of a notice under paragraph 1 or 2 of Schedule 43A, the referred or (as the case may be) counteracted arrangements in relation to the arrangements, or

(ii) under paragraph 6 of Schedule 43B in respect of a generic referral of the arrangements.

(3) In determining any issue in connection with the general anti-abuse rule, a court or tribunal may take into account—

(a) guidance, statements or other material (whether of HMRC, a Minister of the Crown or anyone else) that was in the public domain at the time the arrangements were entered into, and

(b) evidence of established practice at that time.

Relationship between the GAAR and priority rules

212

(1) Any priority rule has effect subject to the general anti-abuse rule (despite the terms of the priority rule).

(2) A “priority rule” means a rule (however expressed) to the effect that particular provisions have effect to the exclusion of, or otherwise in priority to, anything else.

(3) Examples of priority rules are—

(a) the rule in section 464, 699 or 906 of CTA 2009 (priority of loan relationships rules, derivative contracts rules and intangible fixed assets rules for corporation tax purposes), and

(b) the rule in section 6(1) of TIOPA 2010 (effect to be given to double taxation arrangements despite anything in any enactment).

Consequential amendment

213

(1) Section 42 of TMA 1970 (procedure for making claims etc) is amended as follows.

(2) In subsection (2), for “(3ZB)” substitute “ (3ZC) ”.

(3) After subsection (3ZB) insert—

(3ZC) Subsection (2) also does not apply in relation to any claim under section 210 of the Finance Act 2013 (claims for consequential relieving adjustments after counteraction of tax advantage under the general anti-abuse rule).

Interpretation of Part 5

214

(1) In this Part—

“abusive”, in relation to tax arrangements, has the meaning given by section 207(2) to (6);

“arrangements” includes any agreement, understanding, scheme, transaction or series of transactions (whether or not legally enforceable);

“the Commissioners” means the Commissioners for Her Majesty's Revenue and Customs;

“designated HMRC officer” has the meaning given by paragraph 2 of Schedule 43;”.

“the GAAR Advisory Panel” has the meaning given by paragraph 1 of Schedule 43;

“the general anti-abuse rule” has the meaning given by section 206;

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

“notice of binding” has the meaning given by paragraph 2(2) of Schedule 43A or paragraph 10 of Schedule 43D (as the case may be);

“pooling notice” has the meaning given by paragraph 1(3) of Schedule 43A or paragraph 10 of Schedule 43D (as the case may be);

“tax advantage” has the meaning given by section 208;

“tax arrangements” has the meaning given by section 207(1).

“tax enquiry” has the meaning given by section 202(2) of FA 2014.

(2) In this Part references to any “opinion of the GAAR Advisory Panel” about any tax arrangements are to be interpreted in accordance with paragraph 11(5) of Schedule 43.

(3) In this Part references to tax arrangements which are “equivalent” to one another are to be interpreted in accordance with paragraph 11 of Schedule 43A.

Commencement and transitional provision

215

(1) The general anti-abuse rule has effect in relation to any tax arrangements entered into on or after the day on which this Act is passed.

(2) Where the tax arrangements form part of any other arrangements entered into before that day those other arrangements are to be ignored for the purposes of section 207(3), subject to subsection (3).

(3) Account is to be taken of those other arrangements for the purposes of section 207(3) if, as a result, the tax arrangements would not be abusive.

PART 6 — Other provisions

Trusts

Trusts with vulnerable beneficiary

216

Schedule 44 contains provision about trusts which have a vulnerable beneficiary.

Unit trusts

Unauthorised unit trusts

217

(1) The Treasury may by regulations make provision about the treatment of the trustees or unit holders of unauthorised unit trusts for the purposes of income tax, corporation tax, capital gains tax or stamp duty land tax.

(2) Regulations under this section may—

(a) confer or impose powers or duties on officers of Revenue and Customs or other persons;

(b) modify any enactment or instrument (whenever passed or made);

(c) specify descriptions of unauthorised unit trust in relation to which the regulations are to apply or are not to apply;

(d) make different provision for different cases or different purposes;

(e) make incidental, consequential, supplementary and transitional provision and savings.

In paragraph (b) “modify” includes amend, repeal or revoke.

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

(4) A subsequent statutory instrument containing regulations under this section is subject to annulment in pursuance of a resolution of the House of Commons.

(5) In this section—

(a) “unauthorised unit trust” means a unit trust scheme which is neither an authorised unit trust nor an umbrella scheme,

(b) “unit trust scheme” has the meaning given by section 237 of the Financial Services and Markets Act 2000, and

(c) “authorised unit trust”, “umbrella scheme” and “unit holder” have the same meaning as in Chapter 2 of Part 13 of CTA 2010 (authorised investment funds).

Residence

Statutory residence test

218

(1) Schedule 45 contains—

(a) provision for determining whether individuals are resident in the United Kingdom for the purposes of income tax, capital gains tax and (where relevant) inheritance tax and corporation tax,

(b) provision about split years, and

(2) The Treasury may by order make any incidental, supplemental, consequential, transitional or saving provision in consequence of Schedule 45.

(3) An order under subsection (2) may—

(a) make different provision for different purposes, and

(b) make provision amending, repealing or revoking any provision made by or under an Act (whenever passed or made).

(4) An order under subsection (2) is to be made by statutory instrument.

(5) A statutory instrument containing an order under subsection (2) is subject to annulment in pursuance of a resolution of the House of Commons.

Ordinary residence

219

(1) Schedule 46 contains provision removing or replacing rules relating to ordinary residence.

(2) The Treasury may by order make further provision removing or replacing rules relating to ordinary residence with respect to—

(a) income tax,

(b) capital gains tax, and

(3) An order under subsection (2) may take effect from the start of the tax year in which the order is made.

(4) The Treasury may by order make any incidental, supplemental, consequential, transitional or saving provision in consequence of Schedule 46 or in consequence of any further provision made under subsection (2).

(5) An order under this section may—

(a) make different provision for different purposes, and

(b) make provision amending, repealing or revoking any provision made by or under an Act (whenever passed or made).

(6) An order under this section is to be made by statutory instrument.

(7) A statutory instrument containing an order under subsection (2) (whether alone or with other provisions) may not be made unless a draft of the instrument has been laid before, and approved by a resolution of, the House of Commons.

(8) Subject to subsection (7), a statutory instrument containing an order under this section is subject to annulment in pursuance of a resolution of the House of Commons.

International matters

Controlled foreign companies etc

220

Schedule 47 makes provision in relation to CFCs etc.

Agreement between UK and Switzerland

221

(1) In Schedule 36 to FA 2012 (agreement between UK and Switzerland), after paragraph 26 insert—

(26A) (1) Income or chargeable gains of a person are to be treated as not remitted to the United Kingdom if conditions A to D are met. (2) Condition A is that (but for sub-paragraph (1)) the income or gains would be regarded as remitted to the United Kingdom by virtue of the bringing of money to the United Kingdom. (3) Condition B is that the money is brought to the United Kingdom pursuant to a transfer made to HMRC in accordance with the Agreement. (4) Condition C (which applies only if the money brought to the United Kingdom is a sum levied under Article 19(2)(b)) is that the sum was levied within the period of 45 days beginning with the day on which the amount derived from the income or gain in question was remitted as mentioned in Article 19(2)(b). (5) Condition D is that the transfer is made in relation to a tax year in which section 809B, 809D or 809E of ITA 2007 (application of remittance basis) applies to the person. (6) Sub-paragraph (1) does not apply in relation to money brought to the United Kingdom if or to the extent that— (a) paragraph 18(2), or section 138(4)(a) or 140(5)(a) of TIOPA 2010, is applied in relation to it (set-off against other tax liabilities), or (b) it is repaid or refunded by HMRC. (26B) (1) This paragraph applies if— (a) but for paragraph 26A(1), income or chargeable gains would have been regarded as remitted to the United Kingdom by virtue of the bringing of money to the United Kingdom, and (b) section 809Q of ITA 2007 (transfers from mixed funds) would have applied in determining the amount that would have been so remitted. (2) The bringing of the money to the United Kingdom counts as an offshore transfer for the purposes of section 809R(4) of ITA 2007 (composition of mixed fund).

(2) The amendment made by this section is to be treated as having come into force on 1 January 2013.

International agreements to improve tax compliance

222

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

Disclosure

Disclosure of tax avoidance schemes

223

(1) Part 7 of FA 2004 (disclosure of tax avoidance schemes) is amended in accordance with subsections (2) and (3).

(2) After section 312A insert—

(312B) (1) This section applies where a person who is a promoter in relation to notifiable arrangements has provided a person (“the client”) with the information prescribed under section 312(2) (duty of promoter to notify client of reference number). (2) The client must, within the prescribed period, provide the promoter with prescribed information relating to the client. (3) The duty under subsection (2) is subject to any exceptions that may be prescribed.

(3) After section 313ZA insert—

(313ZB) (1) This section applies where— (a) a person who is a promoter in relation to notifiable arrangements has provided HMRC with information in relation to a person (“the client”) under section 313ZA(3) (duty to provide client details), and (b) HMRC suspect that a person other than the client is or is likely to be a party to the arrangements. (2) HMRC may by written notice require the promoter to provide prescribed information in relation to any person other than the client who the promoter might reasonably be expected to know is or is likely to be a party to the arrangements. (3) The promoter must comply with a requirement under or by virtue of subsection (2) within— (a) the prescribed period, or (b) such longer period as HMRC may direct.

(4) In section 98C(2) of TMA 1970 (notification under Part 7 of FA 2004)—

(a) after paragraph (da) insert—

(daa) section 312B (duty of client to provide information to promoter),

, and

(b) after paragraph (db) insert—

(dc) section 313ZB (enquiry following disclosure of client details),

Powers

Powers under Proceeds of Crime Act 2002

224

Schedule 48 makes provision for, and in connection with, conferring powers under Chapter 3 of Part 5 and Chapters 2 and 3 of Part 8 of the Proceeds of Crime Act 2002 on officers of Revenue and Customs.

Definition of “goods” for certain customs purposes

225

In section 1(1) of CEMA 1979 (interpretation), in the definition of “goods”, for “baggage” substitute “ containers ”.

Power to detain goods

226

(1) Section 139 of CEMA 1979 (provisions as to detention, seizure and condemnation of goods etc) is amended as follows.

(2) After subsection (1) insert—

(1A) A person mentioned in subsection (1) who reasonably suspects that any thing may be liable to forfeiture under the customs and excise Acts may detain that thing. (1B) References in this section and Schedule 2A to a thing detained as liable to forfeiture under the customs and excise Acts include a thing detained under subsection (1A).

(3) In subsection (2), for the words from “either” to the end substitute “ deliver that thing to an officer ”.

(4) In subsection (4), for “the Commissioners at the nearest office of customs and excise” substitute “ an officer ”.

(5) In subsection (5), for “Schedule 3” substitute “ Schedules 2A and 3 ”.

(6) After that subsection insert—

(5A) Schedule 2A contains supplementary provisions relating to the detention of things as liable to forfeiture under the customs and excise Acts.

(7) After Schedule 2 to that Act (composite goods: supplementary provisions as to excise duties and drawbacks) insert—

SCHEDULE 2A (1) In this Schedule, references (however expressed) to a thing being detained are references to a thing being detained as liable to forfeiture under the customs and excise Acts. (2) (1) This paragraph applies where a thing is detained. (2) The thing may be detained for 30 days beginning with the day on which the thing is first detained. (3) The thing is deemed to be seized as liable to forfeiture under the customs and excise Acts if its detention ceases to be authorised under this paragraph. (3) (1) The Commissioners must take reasonable steps to give written notice of the detention of any thing, and of the grounds for the detention, to any person who to their knowledge was, at the time of the detention, the owner or one of the owners of the thing. (2) But notice need not be given under sub-paragraph (1) if the detention occurred in the presence of— (a) the person whose offence or suspected offence occasioned the detention, (b) the owner or any of the owners of the thing detained or any servant or agent of such an owner, or (c) in the case of any thing detained on a ship or aircraft, the master or commander. (4) (1) This paragraph applies where a thing is detained and, with the agreement of a person within sub-paragraph (2) (“the responsible person”), the thing remains at the place where it is first detained (rather than being removed and detained elsewhere). (2) A person is within this sub-paragraph if the person is— (a) the owner or any of the owners of the thing at the time it was detained or any servant or agent of such an owner, or (b) a person whom the person who detains the thing reasonably believes to be a person within paragraph (a). (3) If the responsible person fails to prevent the unauthorised removal or disposal of the thing from the place where it is detained, that failure attracts a penalty under section 9 of the Finance Act 1994 (civil penalties). (4) The removal or disposal of the thing is unauthorised unless it is done with the permission of a proper officer of Revenue and Customs. (5) Where any duty of excise is payable in respect of the thing— (a) the penalty is to be calculated by reference to the amount of that duty (whether it has been paid or not), and (b) section 9 of the Finance Act 1994 has effect as if in subsection (2)(a) the words “5 per cent of” were omitted. (6) If no duty of excise is payable in respect of the thing, that section has effect as if the penalty provided for by subsection (2)(b) of that section were whichever is the greater of— (a) the value of the thing at the time it was first detained, or (b) £250. (5) (1) This paragraph applies where— (a) a thing is detained at a revenue trader's premises, (b) the thing is liable to forfeiture under the customs and excise Acts, and (c) without the permission of a proper officer of Revenue and Customs, the thing is removed from the trader's premises, or otherwise disposed of, by any person. (2) The Commissioners may seize, as liable to forfeiture under the customs and excise Acts, goods of equivalent value to the thing, from the revenue trader's stock. (3) For the purposes of this paragraph, a revenue trader's premises include any premises used to hold or store anything for the purposes of the revenue trader's trade, regardless of who owns or occupies the premises.

(8) The amendments made by this section have effect in relation to things detained on or after the day on which this Act is passed.

Penalty instead of forfeiture of larger ships

227

(1) Section 143 of CEMA 1979 (penalty in lieu of forfeiture of larger ship where responsible officer is implicated in offence) is amended as follows.

(2) For subsection (1) (Commissioners' power to impose fine up to £50) substitute—

(1) This section applies where— (a) any ship of 250 or more tons register would, but for section 142, be liable to forfeiture for, or in connection with, any offence under the customs and excise Acts, and (b) in the opinion of the Commissioners, a responsible officer of the ship is implicated either by the officer's own act, or by neglect, in that offence.

(3) In subsection (3) (Commissioners' power to bring condemnation proceedings)—

(a) for the words from the beginning to the first “they” substitute “ The Commissioners ”, and

(b) for “£500” substitute “ £10,000 ”.

(4) In subsection (4) (power to detain ship pending payment of deposit against fine or condemnation proceedings)—

(a) for the words from the beginning to “section, the” substitute “ The ”,

(b) for “£50 or, as the case may be, £500” substitute “ £10,000 ”, and

(5) In paragraph (a) of subsection (6) (definition of “responsible officer)—

(a) after “means” insert “ a person who is, or is acting as, ”,

(b) for “or an engineer” substitute “ , an engineer or the bosun ”, and

(6) After that subsection insert—

(7) If the Treasury consider that there has been a change in the value of money since the Finance Act 2013 was passed or, as the case may be, since the last occasion when the power conferred by this subsection was exercised, they may by order substitute for the sum for the time being specified in subsections (3) and (4) such other sum as appears to them to be justified by the change. (8) An order under subsection (7) may not vary the penalty for any conduct occurring before the coming into force of the order. (9) An order under subsection (7) must be made by statutory instrument. (10) A statutory instrument containing an order under subsection (7) is subject to annulment in pursuance of a resolution of either House of Parliament.

Data-gathering from merchant acquirers etc

228

(1) In Part 2 of Schedule 23 to FA 2011 (data-gathering powers: relevant data-holders), after paragraph 13 insert—

(13A) (1) A person who has a contractual obligation to make payments to retailers in settlement of payment card transactions is a relevant data-holder. (2) In this paragraph— - “payment card” includes a credit card, a charge card and a debit card; - “payment card transaction” means any transaction in which a payment card is accepted as payment; - “retailer” means a person who accepts a payment card as payment for any transaction. (3) In this paragraph any reference to a payment card being accepted as payment includes a reference to any account number or other indicators associated with a payment card being accepted as payment.

(2) This section applies in relation to relevant data with a bearing on any period (whether before, on or after the day on which this Act is passed).

Payment

Corporation tax: deferral of payment of exit charge

229

Schedule 49 contains provision for, and in connection with, deferring the payment by a company of certain corporation tax in circumstances where income, profits or gains arise by virtue of section 25, 185 or 187(4) of TCGA 1992 or section 162, 333, 334, 609, 610, 859 or 862 of CTA 2009.

Penalties: late filing, late payment and errors

230

Schedule 50 contains provision for, and in connection with, penalties for late filing, late payment and errors.

Overpayment relief: generally prevailing practice exclusion and EU law

231

(1) In Schedule 1AB to TMA 1970 (recovery of overpaid tax etc), in paragraph 2 (cases in which Commissioners not liable to give effect to claim), after sub-paragraph (9) insert—

(9A) Cases G and H do not apply where the amount paid, or liable to be paid, is tax which has been charged contrary to EU law. (9B) For the purposes of sub-paragraph (9A), an amount of tax is charged contrary to EU law if, in the circumstances in question, the charge to tax is contrary to— (a) the provisions relating to the free movement of goods, persons, services and capital in Titles II and IV of Part 3 of the Treaty on the Functioning of the European Union, or (b) the provisions of any subsequent treaty replacing the provisions mentioned in paragraph (a).

(2) In Schedule 2 to OTA 1975 (management and collection of petroleum revenue tax), in paragraph 13B (claim for relief for overpaid tax etc: cases in which HMRC not liable to give effect to a claim), after sub-paragraph (8) insert—

(9) Case G does not apply where the amount paid, or liable to be paid, is tax which has been charged contrary to EU law. (10) For the purposes of sub-paragraph (9), an amount of tax is charged contrary to EU law if, in the circumstances in question, the charge to tax is contrary to— (a) the provisions relating to the free movement of goods, persons, services and capital in Titles II and IV of Part 3 of the Treaty on the Functioning of the European Union, or (b) the provisions of any subsequent treaty replacing the provisions mentioned in paragraph (a).

(3) In Part 6 of Schedule 18 to FA 1998 (overpaid tax, excessive assessments or repayments etc), in paragraph 51A (cases in which Commissioners not liable to give effect to a claim), after sub-paragraph (8) insert—

(9) Case G does not apply where the amount paid, or liable to be paid, is tax which has been charged contrary to EU law. (10) For the purposes of sub-paragraph (9), an amount of tax is charged contrary to EU law if, in the circumstances in question, the charge to tax is contrary to— (a) the provisions relating to the free movement of goods, persons, services and capital in Titles II and IV of Part 3 of the Treaty on the Functioning of the European Union, or (b) the provisions of any subsequent treaty replacing the provisions mentioned in paragraph (a).

(4) In Part 6 of Schedule 10 to FA 2003 (relief in case of overpaid tax or excessive assessment), in paragraph 34A (cases in which Commissioners not liable to give effect to a claim), after sub-paragraph (8) insert—

(9) Case G does not apply where the amount paid, or liable to be paid, is tax which has been charged contrary to EU law. (10) For the purposes of sub-paragraph (9), an amount of tax is charged contrary to EU law if, in the circumstances in question, the charge to tax is contrary to— (a) the provisions relating to the free movement of goods, persons, services and capital in Titles II and IV of Part 3 of the Treaty on the Functioning of the European Union, or (b) the provisions of any subsequent treaty replacing the provisions mentioned in paragraph (a).

(5) The amendments made by this section have effect in relation to any claim (in respect of overpaid tax, excessive assessment etc) made after the end of the six month period beginning with the day on which this Act is passed.

Overpayment relief: time limit for claims

232

(1) In Schedule 1AB to TMA 1970 (recovery of overpaid tax etc), in paragraph 3 (making a claim), in sub-paragraph (3) after “the relevant tax year is” insert

— (a) where the amount liable to be paid is excessive by reason of a mistake in a return or returns under section 8, 8A or 12AA, the tax year to which the return (or, if more than one, the first return) relates, and (b) otherwise,

(2) In Schedule 2 to OTA 1975, in paragraph 13C (claim for relief for overpaid tax etc: making a claim), in sub-paragraph (3) after “the relevant chargeable period is” insert

— (a) where the amount liable to be paid is excessive by reason of a mistake in a return or returns under paragraph 2 or 5, the chargeable period to which the return (or, if more than one, the first return) relates, and (b) otherwise,

(3) In Part 6 of Schedule 18 to FA 1998 (overpaid tax, excessive assessments or repayments, etc), in paragraph 51B (making a claim), in sub-paragraph (3), after “the relevant accounting period is” insert

— (a) where the amount liable to be paid is excessive by reason of a mistake in a company tax return or returns, the accounting period to which the return (or, if more than one, the first return) relates, and (b) otherwise,

(4) The amendments made by this section have effect in relation to any claim (in respect of overpaid tax, excessive assessment etc) made after the end of the six month period beginning with the day on which this Act is passed.

Administration

Self assessment: withdrawal of notice to file etc

233

Schedule 51 contains provision for, and in connection with, withdrawing a notice under section 8, 8A or 12AA of TMA 1970 and cancelling liability to a penalty under Schedule 55 to FA 2009.

Interim remedies

Restrictions on interim payments in proceedings relating to taxation matters

234

(1) This section applies to an application for an interim remedy (however described), made in any court proceedings relating to a taxation matter, if the application is founded (wholly or in part) on a point of law which has yet to be finally determined in the proceedings.

(2) Any power of a court to grant an interim remedy (however described) requiring the Commissioners for Her Majesty's Revenue and Customs, or an officer of Revenue and Customs, to pay any sum to any claimant (however described) in the proceedings is restricted as follows.

(3) The court may grant the interim remedy only if it is shown to the satisfaction of the court—

(a) that, taking account of all sources of funding (including borrowing) reasonably likely to be available to fund the proceedings, the payment of the sum is necessary to enable the proceedings to continue, or

(b) that the circumstances of the claimant are exceptional and such that the granting of the remedy is necessary in the interests of justice.

(4) The powers restricted by this section include (for example)—

(a) powers under rule 25 of the Civil Procedure Rules 1998 (S.I. 1998/3132);

(b) powers under Part II of Rule 29 of the Rules of the Court of Judicature (Northern Ireland) (Revision) 1980 (S.R. 1980 No.346).

(5) This section applies in relation to proceedings whenever commenced, but only in relation to applications made in those proceedings on or after 26 June 2013.

(6) This section applies on and after 26 June 2013.

(7) Subsection (8) applies where, on or after 26 June 2013 but before the passing of this Act, an interim remedy was granted by a court using a power which, because of subsection (6), is to be taken to have been restricted by this section.

(8) Unless it is shown to the satisfaction of the court that paragraph (a) or (b) of subsection (3) applied at the time the interim remedy was granted, the court must, on an application made to it under this subsection—

(a) revoke or modify the interim remedy so as to secure compliance with this section, and

(b) if the Commissioners have, or an officer of Revenue and Customs has, paid any sum as originally required by the interim remedy, order the repayment of the sum or any part of the sum as appropriate (with interest from the date of payment).

(9) For the purposes of this section, proceedings on appeal are to be treated as part of the original proceedings from which the appeal lies.

(10) In this section “taxation matter” means anything, other than national insurance contributions, the collection and management of which is the responsibility of the Commissioners for Her Majesty's Revenue and Customs (or was the responsibility of the Commissioners of Inland Revenue or Commissioners of Customs and Excise).

PART 7 — Final provisions

Interpretation

235

(1) In this Act—

“ALDA 1979” means the Alcoholic Liquor Duties Act 1979,

“BGDA 1981” means the Betting and Gaming Duties Act 1981,

“CAA 2001” means the Capital Allowances Act 2001,

“CEMA 1979” means the Customs and Excise Management Act 1979,

“CRCA 2005” means the Commissioners for Revenue and Customs Act 2005,

“CTA 2009” means the Corporation Tax Act 2009,

“CTA 2010” means the Corporation Tax Act 2010,

“F(No.3)A 2010” means the Finance (No. 3) Act 2010,

“HODA 1979” means the Hydrocarbon Oil Duties Act 1979,

“ICTA” means the Income and Corporation Taxes Act 1988,

“IHTA 1984” means the Inheritance Tax Act 1984,

“ITA 2007” means the Income Tax Act 2007,

“ITEPA 2003” means the Income Tax (Earnings and Pensions) Act 2003,

“ITTOIA 2005” means the Income Tax (Trading and Other Income) Act 2005,

“OTA 1975” means the Oil Taxation Act 1975,

“TCGA 1992” means the Taxation of Chargeable Gains Act 1992,

“TIOPA 2010” means the Taxation (International and Other Provisions) Act 2010,

“TMA 1970” means the Taxes Management Act 1970,

“TPDA 1979” means the Tobacco Products Duty Act 1979,

“VATA 1994” means the Value Added Tax Act 1994, and

“VERA 1994” means the Vehicle Excise and Registration Act 1994.

(2) In this Act—

“FA”, followed by a year, means the Finance Act of that year;

“F(No.2)A”, followed by a year, means the Finance (No. 2) Act of that year.

Short title

236

This Act may be cited as the Finance Act 2013.

SCHEDULE 1

Chargeable periods which straddle 1 January 2013

1

(1) This paragraph applies in relation to a chargeable period which begins before 1 January 2013 and ends on or after that date but not later than the specified date (“the first straddling period”).

(1A) The specified date” means—

(a) for the purposes of corporation tax, 31 March 2014, and

(b) for the purposes of income tax, 5 April 2014.

(2) The maximum allowance under section 51A of CAA 2001 for the first straddling period is the sum of each maximum allowance that would be found if—

(a) so much (if any) of the first straddling period as falls before the relevant date,

(b) so much of the first straddling period as falls on or after the relevant date but before 1 January 2013, and

were each treated as separate chargeable periods.

(3) But this is subject to paragraphs 2 and 3.

(4) In this Schedule “the relevant date” means—

(a) for the purposes of corporation tax, 1 April 2012;

(b) for the purposes of income tax, 6 April 2012.

Straddling period beginning before the relevant date

2

(1) This paragraph applies where the first straddling period begins before the relevant date.

(2) So far as concerns expenditure incurred before the relevant date, the maximum allowance under section 51A of CAA 2001 for the first straddling period is what would have been the maximum allowance for that period if the amendment made by section 7(1) had not been made.

(3) So far as concerns expenditure incurred on or after the relevant date but before 1 January 2013, the maximum allowance under section 51A of CAA 2001 for the first straddling period is—

$A − B$

(4) In sub-paragraph (3)—

(a) “A” means the amount that would have been the maximum allowance for the period beginning on the relevant date and ending at the end of the first straddling period if—

(i) that period had been a separate chargeable period, and

(ii) the amendment made by section 7(1) had not been made;

(b) “B” means the amount (if any) by which—

(i) the AIA expenditure incurred in the period mentioned in paragraph 1(2)(a) in respect of which a claim for an annual investment allowance is made, exceeds

(ii) the maximum allowance under section 51A of CAA 2001 for that period if it were treated as a separate chargeable period.

(5) So far as concerns expenditure incurred on or after 1 January 2013, the maximum allowance under section 51A of CAA 2001 for the first straddling period is the sum of each maximum allowance that would be found if the period mentioned in paragraph 1(2)(b) and the period mentioned in paragraph 1(2)(c) were each treated as separate chargeable periods.

First straddling period beginning on or after the relevant date

3

(1) This paragraph applies where no part of the first straddling period falls within paragraph 1(2)(a).

(2) So far as concerns expenditure incurred before 1 January 2013, the maximum allowance under section 51A of CAA 2001 for the first straddling period is to be calculated as if the amendment made by section 7(1) had not been made.

Chargeable periods which straddle 1 January 2015

4

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

Operation of annual investment allowance where restrictions apply

5

(1) Paragraphs 1 to 3 also apply for the purpose of determining the maximum allowance under section 51K of CAA 2001 (operation of annual investment allowance where restrictions apply) in a case where one or more chargeable periods in which the relevant AIA qualifying expenditure is incurred are chargeable periods within paragraph 1(1) ....

(2) There is to be taken into account for those purposes only chargeable periods of one year or less (whether or not they are chargeable periods within paragraph 1(1) ...), and, if there is more than one such period, only that period which gives rise to the greatest maximum allowance.

(3) For the purposes of sub-paragraph (2) any chargeable period which—

(a) is longer than a year, and

(b) ends in the tax year 2012-13, 2013-14, or 2014-15 ,

is to be treated as being a chargeable period of one year ending at the same time as it actually ends.

(4) Section 11(11) of FA 2011 is repealed.

(5) That repeal has effect in relation to cases where one or more chargeable periods in which the relevant AIA qualifying expenditure is incurred are chargeable periods within paragraph 1(1).

(6) Nothing in this paragraph affects the operation of sections 51M and 51N of CAA 2001.

SCHEDULE 2

PART 1 — Retirement of participants

Introduction

1

Part 7 of ITEPA 2003 (employment income: income and exemptions relating to securities) is amended as follows.

2

In section 498 (no charge on shares ceasing to be subject to plan in certain circumstances) in subsection (2)(e) omit the words from “on” to “2)”.

3

In Part 4 of Schedule 2 (types of shares that may be awarded) in paragraph 32 (provision for forfeiture) in sub-paragraph (2)(e) omit the words from “on” to “98)”.

4

Part 11 of Schedule 2 (supplementary provisions) is amended as follows.

5

Omit paragraph 98 (meaning of “specified retirement age”).

6

In paragraph 100 (index of defined expressions) omit the entry for “the specified retirement age”.

SAYE option schemes

7

Part 6 of Schedule 3 (requirements etc relating to share options) is amended as follows.

8

In paragraph 27 (introduction) in sub-paragraph (1)—

(a) omit the entry for paragraph 31,

(b) after the entry for paragraph 32 insert “ and ”, and

9

In paragraph 30 (time for exercising options) in sub-paragraph (2)(a)—

(a) for “32 to” substitute “ 32, ”, and

(b) omit “reaching the specified age without retiring,”.

10

Omit paragraph 31 (requirement to have a “specified age”).

11

Omit paragraph 33 (exercise of options: reaching specified age without retiring).

12

In paragraph 34 (exercise of options: scheme-related employment ends) in sub-paragraph (2)(b) omit the words from “on” to “employment”.

13

In Part 9 of Schedule 3 (supplementary provisions) in paragraph 49 (index of defined expressions) omit the entry for “specified age”.

CSOP schemes

14

In section 524 (no charge in respect of exercise of option) in subsection (2C) omit the definition of “retirement” and the “and” before it.

15

In Part 8 of Schedule 4 (supplementary provisions) omit paragraph 35A (retirement age).

Transitional provision

16

The amendment made by paragraph 11 above has no effect in relation to options granted before the day on which this Act is passed; and the effect of the amendments made by paragraphs 8 to 10 and 13 above is limited accordingly.

17

(1) A SIP, SAYE option scheme or CSOP scheme approved before the day on which this Act is passed has effect with any modifications needed to reflect the amendments made by this Part of this Schedule.

(2) In relation to any shares awarded under a SIP before that day which are subject to provision for forfeiture, that provision has effect with any modifications needed to reflect the amendment made by paragraph 3 above.

(3) Because of paragraphs 48 and 58 below, that amendment is not relevant to shares awarded under a SIP on or after that day.

PART 2 — “Good leavers” (other than retirees)

Introduction

18

Part 7 of ITEPA 2003 (employment income: income and exemptions relating to securities) is amended as follows.

19

In section 498 (no charge on shares ceasing to be subject to plan in certain circumstances) after subsection (2) insert—

(3) A participant is not liable to income tax on shares (“the relevant shares”) in a company (“the relevant company”) being withdrawn from the plan if— (a) the withdrawal of the relevant shares from the plan relates to— (i) a transaction resulting from a compromise, arrangement or scheme falling within subsection (9), (ii) an offer forming part of a general offer falling within subsection (10), or (iii) the application of sections 979 to 982 or 983 to 985 of the Companies Act 2006 in the case of a takeover offer (as defined in section 974 of that Act) falling within subsection (13), and (b) as a result of, as the case may be— (i) the transaction, (ii) the offer, or (iii) the application of sections 979 to 982 or 983 to 985 of the Companies Act 2006, the participant receives cash (and no other assets) in exchange for the relevant shares. (4) For the purposes of subsection (3)(b) it does not matter if the participant receives other assets in exchange for shares other than the relevant shares. (5) Subsection (3) does not apply to the relevant shares (or to a proportion of them) if in connection with, as the case may be— (a) the compromise, arrangement or scheme, (b) the general offer, or (c) the takeover offer, a course of action was open to the participant which, had it been followed, would have resulted in other assets being received in exchange for the relevant shares (or the proportion of them) instead of cash. (6) Subsection (3) does not apply to the relevant shares (or to a proportion of them) if it is reasonable to suppose that the relevant shares (or the proportion of them) would not have been awarded to the participant— (a) had, as the case may be— (i) the compromise, arrangement or scheme, (ii) the general offer, or (iii) the takeover offer, not been made, or (b) had any arrangements for the making of— (i) a compromise, arrangement or scheme which would fall within subsection (9), (ii) a general offer which would fall within subsection (10), or (iii) a takeover offer (as defined in section 974 of the Companies Act 2006) which would fall within subsection (13), which were in place or under consideration at any time not been in place or under consideration. (7) In subsection (6) the reference to shares being awarded to the participant is to be read, in the case of dividend shares, as a reference to the shares being acquired by the trustees on the participant's behalf. (8) In subsection (6)(b) “arrangements” includes any plan, scheme, agreement or understanding, whether or not legally enforceable. (9) A compromise, arrangement or scheme falls within this subsection if it is applicable to or affects— (a) all the ordinary share capital of the relevant company or all the shares of the same class as the relevant shares, or (b) all the shares, or all the shares of that same class, which are held by a class of shareholders identified otherwise than by reference to their employment or their participation in an approved SIP. (10) A general offer falls within this subsection if— (a) it is made to holders of shares of the same class as the relevant shares or to holders of shares in the relevant company, and (b) it is made in the first instance on a condition such that if it is satisfied the person making the offer will have control of the relevant company. (11) For the purposes of subsection (10) it does not matter if the general offer is made to different shareholders by different means. (12) In subsection (10)(b) “control” has the meaning given by sections 450 and 451 of CTA 2010. (13) A takeover offer falls within this subsection if— (a) it relates to the relevant company, and (b) where there is more than one class of share in the relevant company, the class or classes to which it relates is or include the class of the relevant shares.

20

(1) In Part 5 of Schedule 2 (free shares) in paragraph 37 (holding period: power of participant to direct trustees to accept general offers etc) after sub-paragraph (6) insert—

(7) For the purposes of sub-paragraph (5) it does not matter if the general offer is made to different shareholders by different means. (8) If in the case of a takeover offer (as defined in section 974 of the Companies Act 2006) there arises a right under section 983 of that Act to require the offeror to acquire the participant's free shares, or such of them as are of a particular class, the participant may direct the trustees to exercise that right.

(2) A SIP approved before the day on which this Act is passed has effect with any modifications needed to reflect the amendment made by this paragraph.

SAYE option schemes

21

In section 519 (no charge in respect of exercise of option) after subsection (3) insert—

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