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

(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—

(3A) In relation to any shares acquired by the exercise of the share option, no liability to income tax arises in respect of its exercise if— (a) the individual exercises the option before the third anniversary of the date on which the option was granted at a time when the SAYE option scheme is approved, (b) the option is exercised by virtue of a provision included in the scheme— (i) under paragraph 37(1) of Schedule 3 where the relevant date is the relevant date for the purposes of paragraph 37(2) or (4), or (ii) under paragraph 37(6) of Schedule 3, (c) as a result of, as the case may be— (i) the general offer, (ii) the compromise or arrangement, or (iii) the takeover offer, the individual receives cash (and no other assets) in exchange for the shares, (d) when the decision to grant the option was taken— (i) the general offer, (ii) the compromise or arrangement, or (iii) the takeover offer, as the case may be, had not been made, (e) when that decision was taken, no arrangements were in place or under consideration for— (i) the making of a general offer which would fall within subsection (3D), (ii) the making of any compromise or arrangement which would fall within subsection (3H), or (iii) the making of a takeover offer (as defined in section 974 of the Companies Act 2006) which would fall within subsection (3I), (f) if the scheme includes a provision under paragraph 38 of Schedule 3 (“the paragraph 38 provision”), in connection with— (i) the general offer, (ii) the compromise or arrangement, or (iii) the takeover offer, as the case may be, no course of action was open to the individual which, had it been followed, would have resulted in the individual making an agreement under the paragraph 38 provision which would have prevented the individual from acquiring the shares by the exercise of the option, and (g) the avoidance of tax or national insurance contributions is not the main purpose (or one of the main purposes) of any arrangements under which the option was granted or is exercised. (3B) In subsection (3A)(c)(iii), (d)(iii) and (f)(iii) “the takeover offer” means the takeover offer (as defined in section 974 of the Companies Act 2006) giving rise to the application of sections 979 to 982 or 983 to 985 of that Act. (3C) In subsection (3A)(e) “arrangements” includes any plan, scheme, agreement or understanding, whether or not legally enforceable. (3D) A general offer falls within this subsection if it is— (a) a general offer to acquire the whole of the issued ordinary share capital of the relevant company which is made on a condition such that, if it is met, the person making the offer will have control of the relevant company, or (b) a general offer to acquire all the shares in the relevant company which are of the same class as those acquired by the exercise of the option. (3E) In subsection (3D)(a) the reference to the issued ordinary share capital of the relevant company does not include any capital already held by the person making the offer or a person connected with that person and in subsection (3D)(b) the reference to the shares in the relevant company does not include any shares already held by the person making the offer or a person connected with that person. (3F) For the purposes of subsection (3D)(a) and (b) it does not matter if the general offer is made to different shareholders by different means. (3G) For the purposes of subsection (3D)(a) a person is to be treated as obtaining control of a company if that person and others acting in concert together obtain control of it. (3H) A compromise or arrangement 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 those acquired by the exercise of the option, 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 directorships or their participation in an approved SAYE option scheme. (3I) 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 shares acquired by the exercise of the option. (3J) In subsections (3D), (3H) and (3I) “the relevant company” means the company whose shares are acquired by the exercise of the option.

22

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

23

(1) Paragraph 34 (exercise of options: scheme-related employment ends) is amended as follows.

(2) In sub-paragraph (2)—

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

(b) after paragraph (b) insert—

(c) a relevant transfer within the meaning of the Transfer of Undertakings (Protection of Employment) Regulations 2006, or (d) if P holds office or is employed in a company which is an associated company (as defined in paragraph 35(4)) of the scheme organiser, that company ceasing to be an associated company of the scheme organiser by reason of a change of control (as determined in accordance with sections 450 and 451 of CTA 2010),

(3) In sub-paragraphs (4) and (5A)(b) for “or (b)” substitute “ to (d) ”.

(4) A SAYE option scheme approved before the day on which this Act is passed has effect with any modifications needed to reflect the amendments made by this paragraph.

24

(1) Paragraph 37 (exercise of options: company events) is amended as follows.

(2) After sub-paragraph (3) insert—

(3A) In sub-paragraph (3)(a) the reference to the issued ordinary share capital of the company does not include any capital already held by the person making the offer or a person connected with that person and in sub-paragraph (3)(b) the reference to the shares in the company does not include any shares already held by the person making the offer or a person connected with that person. (3B) For the purposes of sub-paragraph (3)(a) and (b) it does not matter if the general offer is made to different shareholders by different means.

(3) A SAYE option scheme approved before the day on which this Act is passed which contains provision under paragraph 37(1) of Schedule 3 to ITEPA 2003 by reference to paragraph 37(2) has effect with any modifications needed to reflect the amendment made by sub-paragraph (2).

(4) In sub-paragraph (4) for the words from “proposed” to the end substitute

applicable to or affecting— (a) all the ordinary share capital of the company or all the shares of the same class as the shares to which the option relates, 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 directorships or their participation in an approved SAYE option scheme.

(5) A SAYE option scheme approved before the day on which this Act is passed which contains provision under paragraph 37(1) of Schedule 3 to ITEPA 2003 by reference to paragraph 37(4) has effect with any modifications needed to reflect the amendment made by sub-paragraph (4).

(6) In sub-paragraph (6)—

(a) after “982” insert “ or 983 to 985 ”, and

(b) after “shareholder” insert “ etc ”.

(7) A SAYE option scheme approved before the day on which this Act is passed which contains provision under paragraph 37(6) of Schedule 3 to ITEPA 2003 has effect with any modifications needed to reflect the amendments made by sub-paragraph (6).

25

(1) In Part 7 of Schedule 3 (exercise of share options) paragraph 38 (exchange of options on company reorganisation) is amended as follows.

(2) In sub-paragraph (2)(c)—

(a) after “982” insert “ or 983 to 985 ”, and

(b) after “shareholder” insert “ etc ”.

(3) After sub-paragraph (2) insert—

(2A) In sub-paragraph (2)(a)(i) the reference to the issued ordinary share capital of the scheme company does not include any capital already held by the person making the offer or a person connected with that person and in sub-paragraph (2)(a)(ii) the reference to the shares in the scheme company does not include any shares already held by the person making the offer or a person connected with that person. (2B) For the purposes of sub-paragraph (2)(a)(i) and (ii) it does not matter if the general offer is made to different shareholders by different means.

(4) A SAYE option scheme approved before the day on which this Act is passed which contains provision under paragraph 38 of Schedule 3 to ITEPA 2003 has effect with any modifications needed to reflect the amendments made by this paragraph.

CSOP schemes

26

(1) Section 524 (no charge in respect of exercise of option) is amended as follows.

(2) In subsection (2B) for paragraph (a) substitute—

(a) has ceased to be in qualifying employment because of— (i) injury, disability, redundancy or retirement, (ii) a relevant transfer within the meaning of the Transfer of Undertakings (Protection of Employment) Regulations 2006, or (iii) in the case of a group scheme where the qualifying employment is as a director or employee of a constituent company, that company ceasing to be controlled by the scheme organiser, and

(3) After subsection (2B) insert—

(2BA) For the purposes of subsection (2B) an individual is in “qualifying employment” if the individual is a full-time director or qualifying employee (as defined in paragraph 8(2) of Schedule 4) of— (a) the scheme organiser, or (b) in the case of a group scheme, a constituent company.

(4) In subsection (2C) for “(2B)” substitute “ (2B)(a)(i) ”.

(5) After subsection (2C) insert—

(2D) Subsection (2B)(a)(iii) does not cover a case where the constituent company was controlled by the scheme organiser by virtue of paragraph 34 of Schedule 4 (jointly owned companies). (2E) In relation to any shares acquired by the exercise of the share option, no liability to income tax arises in respect of its exercise if— (a) the individual exercises the option before the third anniversary of the date on which the option was granted at a time when the CSOP scheme is approved, (b) the option is exercised by virtue of a provision included in the scheme under paragraph 25A of Schedule 4, (c) as a result of, as the case may be— (i) the general offer, (ii) the compromise or arrangement, or (iii) the takeover offer, the individual receives cash (and no other assets) in exchange for the shares, (d) when the decision to grant the option was taken— (i) the general offer, (ii) the compromise or arrangement, or (iii) the takeover offer, as the case may be, had not been made, (e) when that decision was taken, no arrangements were in place or under consideration for— (i) the making of a general offer which would fall within subsection (2H), (ii) the making of any compromise or arrangement which would fall within subsection (2L), or (iii) the making of a takeover offer (as defined in section 974 of the Companies Act 2006) which would fall within subsection (2M), (f) if the scheme includes a provision under paragraph 26 of Schedule 4 (“the paragraph 26 provision”), in connection with— (i) the general offer, (ii) the compromise or arrangement, or (iii) the takeover offer, as the case may be, no course of action was open to the individual which, had it been followed, would have resulted in the individual making an agreement under the paragraph 26 provision which would have prevented the individual from acquiring the shares by the exercise of the option, and (g) the avoidance of tax or national insurance contributions is not the main purpose (or one of the main purposes) of any arrangements under which the option was granted or is exercised. (2F) In subsection (2E)(c)(iii), (d)(iii) and (f)(iii) “the takeover offer” means the takeover offer (as defined in section 974 of the Companies Act 2006) giving rise to the application of sections 979 to 982 or 983 to 985 of that Act. (2G) In subsection (2E)(e) “arrangements” includes any plan, scheme, agreement or understanding, whether or not legally enforceable. (2H) A general offer falls within this subsection if it is— (a) a general offer to acquire the whole of the issued ordinary share capital of the relevant company which is made on a condition such that, if it is met, the person making the offer will have control of the relevant company, or (b) a general offer to acquire all the shares in the relevant company which are of the same class as those acquired by the exercise of the option. (2I) In subsection (2H)(a) the reference to the issued ordinary share capital of the relevant company does not include any capital already held by the person making the offer or a person connected with that person and in subsection (2H)(b) the reference to the shares in the relevant company does not include any shares already held by the person making the offer or a person connected with that person. (2J) For the purposes of subsection (2H)(a) and (b) it does not matter if the general offer is made to different shareholders by different means. (2K) For the purposes of subsection (2H)(a) a person is to be treated as obtaining control of a company if that person and others acting in concert together obtain control of it. (2L) A compromise or arrangement 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 those acquired by the exercise of the option, 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 directorships or their participation in an approved CSOP scheme. (2M) 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 shares acquired by the exercise of the option. (2N) In subsections (2H), (2L) and (2M) “the relevant company” means the company whose shares are acquired by the exercise of the option.

27

Part 5 of Schedule 4 (requirements etc relating to share options) is amended as follows.

28

In paragraph 21 (introduction) in sub-paragraph (2)—

(a) after the entry for paragraph 24 omit “or”, and

(b) after the entry for paragraph 25 insert

, or paragraph 25A (exercise of options: company events)

29

After paragraph 25 insert—

Reading this document does not replace reading the official text published on legislation.gov.uk. Contains public sector information licensed under the Open Government Licence v3.0. We assume no responsibility for any inaccuracies arising from the conversion of the original CLML XML to this format.

This text is published under legislation.gov.uk's own terms of reuse, not a Legalize or public-domain licence. legislation.gov.uk
Open Government Licence v3.0 (attribution required)
© Crown and database right. Derived from content available under the Open Government Licence v3.0 from legislation.gov.uk.