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Finance Act 2015

Type Public General Act

Publication 2015-03-26

Last updated 2023-07-11

State In force

Department Statute Law Database

Source legislation.gov.uk

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“company” has the same meaning as in the Corporation Tax Acts (see section 1121 of CTA 2010);

“connected” is to be read in accordance with sections 1122 and 1123 of CTA 2010;

“designated HMRC officer” means an officer of Revenue and Customs who has been designated by the Commissioners for Her Majesty's Revenue and Customs for the purposes of diverted profits tax;

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

“non-UK resident” has the same meaning as in the Corporation Tax Acts (see section 1119 of CTA 2010);

“non-UK tax” has the meaning given by section 187 of CTA 2010;

“the notional PE profits” has the meaning given by section 88(5);

“partnership” includes—a limited liability partnership to which section 1273 of CTA 2009 applies, andan entity established under the law of a territory outside the United Kingdom of a similar character to a partnership,and “member” of a partnership is to be read accordingly;

“permanent establishment”, in relation to a company, has the meaning given by Chapter 2 of Part 24 of CTA 2010 (and accordingly section 1141(1) of that Act has effect, for the purposes of this Part, as if the reference to the Corporation Tax Acts included a reference to this Part);

“small or medium-sized enterprise” means a small enterprise, or a medium-sized enterprise, within the meaning of section 172 of TIOPA 2010;

“the review period” has the meaning given by section 101;

“the tax reduction” has the meaning given by section 107(4);

“UK resident” has the same meaning as in the Corporation Tax Acts (see section 1119 of CTA 2010);

“UKPE” has the same meaning as in section 81.

(2) For the purposes of this Part a tax may correspond to corporation tax even though—

(a) it is chargeable under the law of a province, state or other part of a country, or

(b) it is levied by or on behalf of a municipality or other local body.

Final provisions

Application of other enactments to diverted profits tax

115

(1) In section 206(3) of FA 2013 (taxes to which the general anti-abuse rule applies), after paragraph (d) insert—

(da) diverted profits tax,

(2) In paragraph 7 of Schedule 6 to FA 2010 (enactments to which definition of “charity” in Part 1 of that Schedule applies) omit the “and” after paragraph (h) and after paragraph (i) insert

, and (j) diverted profits tax.

(3) In section 1139 of CTA 2010 (definition of “tax advantage” for the purposes of provisions of the Corporation Tax Acts which apply this section), in subsection (2), omit the “or” at the end of paragraph (da) and after paragraph (e) insert

, or (f) the avoidance or reduction of a charge to diverted profits tax.

(4) In section 178 of FA 1989 (setting rates of interest), in subsection (2), omit the “and” before paragraph (u) and after that paragraph insert

, and (v) section 79 of FA 2015.

(5) In section 1 of the Provisional Collection of Taxes Act 1968 (temporary statutory effect of House of Commons resolutions affecting income tax, purchase tax or customs or excise duties), in subsection (1), after “the bank levy,” insert “ diverted profits tax, ”.

Commencement and transitional provision

116

(1) This Part has effect in relation to accounting periods beginning on or after 1 April 2015.

(2) For the purposes of this Part, if an accounting period of a company begins before and ends on or after 1 April 2015 (“the straddling period”)—

(a) so much of that accounting period as falls before 1 April 2015 and so much of it as falls on or after that date are treated as separate accounting periods, and

(b) where it is necessary to apportion amounts for the straddling period to the different parts of that period, that apportionment is to be made on a just and reasonable basis.

(3) For the purposes of any accounting period which ends on or before 31 March 2016, section 92 has effect as if in subsection (2)(b) of that section the reference to 3 months were a reference to 6 months.

(4) This Part does not apply in relation to any profits arising to a Lloyd's corporate member which are—

(a) mentioned in section 220(2) of FA 1994 (Lloyd's underwriters: accounting period in which certain profits or losses arise), and

(b) declared in the calendar year 2015 or a later calendar year,

to the extent that those profits are referable, on a just and reasonable basis, to times before 1 April 2015.

(5) In subsection (4) “Lloyd's corporate member” means a body corporate which is a member of Lloyd's and is or has been an underwriting member.

PART 4 — Other provisions

Anti-avoidance

Disclosure of tax avoidance schemes

117

Schedule 17 contains amendments relating to the disclosure of tax avoidance schemes.

Accelerated payments and group relief

118

Schedule 18 contains provision about the relationship between accelerated payments and group relief.

Promoters of tax avoidance schemes

119

Schedule 19 contains provision about promoters of tax avoidance schemes.

Penalties in connection with offshore matters and offshore transfers

120

(1) Schedule 20 contains provisions amending—

(a) Schedule 24 to FA 2007 (penalties for errors),

(b) Schedule 41 to FA 2008 (penalties for failure to notify), ...

(d) Schedule 43C to FA 2013 (as amended by FA 2016).

(2) That Schedule comes into force on such day as the Treasury may by order appoint.

(3) An order under subsection (2)—

(a) may commence a provision generally or only for specified purposes, and

(b) may appoint different days for different provisions or for different purposes.

(4) The power to make an order under this section is exercisable by statutory instrument.

Penalties in connection with offshore asset moves

121

Schedule 21 contains provision for imposing an additional penalty in cases where—

(a) a person is liable for a penalty for a failure to comply with an obligation or provide a document, or for providing an inaccurate document, relating to income tax, capital gains tax or inheritance tax, and

(b) there is a related transfer of, or change in the ownership arrangements for, an asset situated or held outside the United Kingdom.

Country-by-country reporting

122

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

Status for tax purposes of certain bodies

123

In the enactments to which Part 1 of Schedule 6 to FA 2010 applies, any reference to a charity includes—

(a) the Commonwealth War Graves Commission, and

(b) the Imperial War Graves Endowment Fund Trustees.

Government stock

Redemption of undated government stocks

124

(1) The Treasury may redeem at par any stock—

(a) which is described in Schedule 1 to the National Debt Act 1870, or

(b) to which that Act applies by virtue of section 1(5) of the National Debt (Conversion of Stock) Act 1884 or section 2(5) of the National Debt (Conversion) Act 1888.

(2) The Treasury must give at least 3 months' notice in the London Gazette of their intention to redeem any stock under this section.

(3) The sums required to redeem the stock are charged on the National Loans Fund, with recourse to the Consolidated Fund (and section 22(2) of the National Loans Act 1968 applies for the purposes of this section as if this section were contained in that Act).

(4) The following do not apply in relation to a redemption under this section—

(a) in section 5 of the National Debt Act 1870, the words from “All the annuities” to the end,

(b) section 1(2) and (3) of the National Debt (Conversion of Stock) Act 1884, and

(5) The following are repealed—

(a) section 19 of the Revenue, Friendly Societies, and National Debt Act 1882,

(b) the National Debt (Conversion of Stock) Act 1884, and

(6) Subsection (5) comes into force on such day as the Treasury may by regulations made by statutory instrument appoint (and the regulations may appoint different days for different paragraphs of that subsection).

(7) The other provisions of this section come into force on the day on which this Act is passed.

PART 5 — Final provisions

Commencement orders and regulations

125

(1) In section 287(4) of TCGA 1992 (exceptions from negative resolution procedure), for paragraph (b) substitute—

(b) if the order or regulations provide for any provision of an enactment relating to the taxation of chargeable gains to come into force or have effect in accordance with the order or regulations.

(2) In section 1014(6) of ITA 2007 (exceptions from negative resolution procedure), for paragraph (b) substitute—

(b) if the order or regulations provide for any provision of the Income Tax Acts to come into force or have effect in accordance with the order or regulations,

(3) In section 1171(6) of CTA 2010 (exceptions from negative resolution procedure), for paragraph (b) substitute—

(b) if the order or regulations provide for any provision of the Corporation Tax Acts to come into force or have effect in accordance with the order or regulations.

(4) The amendments made by this section have effect only in relation to powers conferred after this Act is passed.

Interpretation

126

(1) In this Act—

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

“CAA 2001” means the Capital Allowances Act 2001,

“CTA 2009” means the Corporation Tax Act 2009,

“CTA 2010” means the Corporation Tax Act 2010,

“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.

Short title

127

This Act may be cited as the Finance Act 2015.

SCHEDULE 1

PART 1 — Amendments of ITEPA 2003

1

ITEPA 2003 is amended as follows.

2

In section 7 (meaning of “employment income”, “general earnings” and “specific employment income”), in subsection (5)(b), for “11” substitute “ 10 ”.

3

In section 17 (UK resident employees: treatment of earnings for year in which employment not held), in subsection (4), for “11” substitute “ 10 ”.

4

In section 30 (remittance basis and non-UK resident employees: treatment of earnings for year in which employment not held), in subsection (4), for “11” substitute “ 10 ”.

5

(1) Section 63 (the benefits code) is amended as follows.

(2) In subsection (1)—

(a) at the end of the entry relating to Chapter 7 insert “ and ”, and

(b) omit the entry relating to Chapter 11 and the “and” before it.

(3) Omit subsections (2) to (4).

6

In section 66 (meaning of “employment” and related expressions), after subsection (4) insert—

(5) In the benefits code “lower-paid employment as a minister of religion” has the same meaning as in Part 4 (see section 290D).

7

In section 148 (reduction of cash equivalent where car is shared), omit subsection (3).

8

In section 157 (reduction of cash equivalent where van is shared), omit subsection (3).

9

(1) Section 169 (car available to more than one family member etc employed by same employer) is amended as follows.

(2) For subsection (2)(b) substitute—

(b) M's employment is lower-paid employment as a minister of religion.

(3) Omit subsections (3) and (4).

10

(1) Section 169A (van available to more than one family member etc employed by same employer) is amended as follows.

(2) For subsection (2)(b) substitute—

(b) M's employment is lower-paid employment as a minister of religion.

(3) Omit subsections (3) and (4).

11

In section 184 (interest treated as paid), in subsection (3), for the words following “any of” substitute “the following Chapters of this Part—

Chapter 3 (taxable benefits: expenses payments);

Chapter 6 (taxable benefits: cars, vans and related benefits);

Chapter 10 (taxable benefits: residual liability to charge).”

12

(1) Section 188 (loan released or written off: amount treated as earnings) is amended as follows.

(2) In subsection (2), for “an excluded employment”, in each place, substitute “ lower-paid employment as a minister of religion ”.

(3) In subsection (3)(a), for “excluded employment” substitute “ lower-paid employment as a minister of religion ”.

13

In section 228 (effect of exemptions in Part 4 on liability under provisions outside Part 2), in subsection (2)(d), for “290 and” substitute “ 290, 290C to ”.

14

(1) Section 239 (payments and benefits connected with taxable cars and vans and exempt heavy goods vehicles) is amended as follows.

(2) In subsection (8), for “excluded employment” substitute “ lower-paid employment as a minister of religion (see section 290D) ”.

(3) Omit subsection (9).

15

In section 266 (exemption of non-cash vouchers for exempt benefits), in subsection (5), for “excluded employment” substitute “ lower-paid employment as a minister of religion ”.

16

In section 267 (exemption of credit-tokens used for exempt benefits), in subsection (1)(b), for “excluded employment” substitute “ lower-paid employment as a minister of religion ”.

17

In section 269 (exemption where benefits or money obtained in connection with taxable car or van or exempt heavy goods vehicle), in subsection (4)(b), for “excluded employment” substitute “ lower-paid employment as a minister of religion ”.

18

In section 290 (accommodation benefits of ministers of religion), in subsection (2), for “excluded employment” substitute “ lower-paid employment as a minister of religion (see section 290D) ”.

19

In section 290A (accommodation outgoings of ministers of religion)—

(a) in subsection (1), for “a religious denomination” substitute “ religion ”,

(b) in subsection (3), omit the definition of “lower-paid employment”, and

20

In section 290B (allowances paid to ministers of religion in respect of accommodation outgoings)—

(a) in subsection (1), for “a religious denomination” substitute “ religion ”,

(b) in subsection (3), for “and “lower-paid employment” have the same meanings” substitute “ has the same meaning ”, and

21

(1) Part 2 of Schedule 1 (index of defined expressions) is amended as follows.

(2) Omit both entries relating to “excluded employment” and the entry relating to “lower-paid employment”.

(3) At the appropriate place insert—

lower-paid employment as a minister of religion (in the benefits code)	section 66(5)
lower-paid employment as a minister of religion (in Part 4)	section 290D

22

(1) Schedule 7 (transitionals and savings) is amended as follows.

(2) In paragraph 17 (taxable benefits: benefits code)—

(a) in sub-paragraph (2), for “the Chapters” to “lower-paid employments)” substitute “ Chapters 3, 6, 7 and 10 of the benefits code (provisions not applicable before the tax year 2016-17 to lower-paid employments) ”, and

(b) omit sub-paragraph (4).

(3) In paragraph 27(3) (loans released or written off)—

(a) in paragraph (a), for “ “not an excluded employment”” substitute “ “not lower-paid employment as a minister of religion” ”;

(b) in paragraph (b), for “ “excluded employment”” substitute “ “lower-paid employment as a minister of religion” ”.

PART 2 — Amendments of other enactments

23

(1) The Social Security Contributions and Benefits Act 1992 is amended as follows.

(2) In section 10 (Class 1A contributions: benefits in kind etc), in subsection (1)(b)(ii), for “an excluded employment” substitute “ lower-paid employment as a minister of religion ”.

(3) In section 10ZB (non-cash vouchers provided by third parties), in subsection (2)—

(a) in paragraph (a), for “an excluded employment for the purposes of the benefits code” substitute “ lower-paid employment as a minister of religion ”, and

(b) in paragraph (b) and in the words following that paragraph, for “an excluded employment” substitute “ lower-paid employment as a minister of religion ”.

(4) In section 122 (interpretation of Parts 1 to 6), in subsection (1)—

(a) omit the entry relating to “excluded employment”, and

(b) at the appropriate place insert—

“lower-paid employment as a minister of religion” has the meaning given by section 290D of ITEPA 2003;

24

(1) The Social Security Contributions and Benefits (Northern Ireland) Act 1992 is amended as follows.

(2) In section 10 (Class 1A contributions: benefits in kind etc), in subsection (1)(b)(ii), for “an excluded employment” substitute “ lower-paid employment as a minister of religion ”.

(3) In section 10ZB (non-cash vouchers provided by third parties), in subsection (2)—

(a) in paragraph (a), for “an excluded employment for the purposes of the benefits code” substitute “ lower-paid employment as a minister of religion ”, and

(b) in paragraph (b) and in the words following that paragraph, for “an excluded employment” substitute “ lower-paid employment as a minister of religion ”.

(4) In section 121 (interpretation of Parts 1 to 6), in subsection (1)—

(a) omit the entry relating to “excluded employment”, and

(b) at the appropriate place insert—

“lower-paid employment as a minister of religion” has the meaning given by section 290D of ITEPA 2003;

25

(1) Section 173 of FA 2004 (provision of benefits by registered pension scheme) is amended as follows.

(2) In subsection (2), for “an excluded employment” substitute “ lower-paid employment as a minister of religion ”.

(3) In subsection (3)—

(a) in the opening words, for “an excluded employment” substitute “ an employment which is lower-paid employment as a minister of religion ”, and

(b) in paragraph (a), for “an excluded employment” substitute “ lower-paid employment as a minister of religion ”.

(4) In subsection (6), for “an excluded employment” substitute “ lower-paid employment as a minister of religion ”.

(5) In subsection (7), for “an excluded employment” substitute “ an employment which is lower-paid employment as a minister of religion ”.

(6) In subsection (10), for the definition of “excluded employment” substitute—

“lower-paid employment as a minister of religion” has the meaning given by section 290D of that Act,

26

In CTA 2010, in section 1065 (exception for benefits treated as employment income etc), in the first column of the table, for the words from “in section 216” to “lower-paid employment)” substitute “ in section 290C of that Act (provisions of benefits code not applicable to lower-paid ministers of religion) ”.

SCHEDULE 2

PART 1 — Main provisions

1

In CTA 2010, after Part 7 insert—

(269A) (1) This Part contains provision about banking companies. (2) Chapter 2 defines “banking company” and contains other definitions applying for the purposes of this Part. (3) Chapter 3 contains provision restricting the amount of certain deductions which a banking company may make in calculating its taxable total profits for an accounting period. (269B) (1) In this Part “banking company”, in relation to an accounting period, means— (a) a company which meets conditions A to E, (b) a company which— (i) meets conditions A and B, and (ii) is a member of a partnership which meets conditions C to E, or (c) a building society. In subsections (4) to (6) “the relevant entity” means the company or the partnership (as the case may be). (2) Condition A is that at any time during the accounting period the company— (a) is a UK resident company, or (b) is a company which carries on a trade in the United Kingdom through a permanent establishment in the United Kingdom. (3) Condition B is that the company is not an excluded entity at any time during the accounting period (see section 269BA). (4) Condition C is that, at any time during the accounting period, the relevant entity is an authorised person for the purposes of FISMA 2000 (see section 31 of that Act). (5) Condition D is that, at any time during the accounting period— (a) the relevant entity's activities include the relevant regulated activity described in the provision mentioned in section 269BB(a), (b) the relevant entity is both an IFPRU 730k firm and a full scope IFPRU investment firm, whose activities consist wholly or mainly of any of the relevant regulated activities described in the provisions mentioned in section 269BB(b) to (f), or (c) the relevant entity is both a BIPRU 730k firm and a full scope BIPRU investment firm, whose activities consist wholly or mainly of any of the relevant regulated activities described in the provisions mentioned in section 269BB(b) to (f). (6) Condition E is that the relevant entity carries on that relevant regulated activity, or those relevant regulated activities, wholly or mainly in the course of trade. (7) See also section 269BC (which contains definitions of terms used in this section). (269BA) (1) For the purposes of section 269B “excluded entity” means any of the following entities— (a) an insurance company or an insurance special purpose vehicle; (b) an entity which is a member of a group and does not carry on any relevant regulated activities otherwise than on behalf of an insurance company or insurance special purpose vehicle which is a member of the group; (c) an entity which does not carry on any relevant regulated activities otherwise than as the manager of a pension scheme; (d) an investment trust; (e) an entity which does not carry on any relevant regulated activities other than asset management activities; (f) an exempt IFPRU commodities firm or exempt BIPRU commodities firm; (g) an entity which does not carry on any relevant regulated activities otherwise than for the purpose of trading in commodities or commodity derivatives; (h) an entity which does not carry on any relevant regulated activities otherwise than for the purpose of dealing in contracts for differences— (i) as principal with persons all or all but an insignificant proportion of whom are retail clients, or (ii) with another person to enable the entity or other person to deal in contracts for differences as principal with persons all or all but an insignificant proportion of whom are retail clients; (i) a society incorporated under the Friendly Societies Act 1992; (j) a society registered as a credit union under the Co-operative and Community Benefit Societies Act 2014 or the Credit Unions (Northern Ireland) Order 1985 (S.I. 1985/1205 (N.I. 12)); (k) a building society. (2) For the meaning of “relevant regulated activity”, see section 269BB. See also section 269BC (which contains definitions of other terms used in this section). (269BB) In this Part “relevant regulated activity” means an activity which is a regulated activity for the purposes of FISMA 2000 by virtue of any of the following provisions of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 (S.I. 2001/544)— (a) article 5 (accepting deposits); (b) article 14 (dealing in investments as principal); (c) article 21 (dealing in investments as agent); (d) article 25 (arranging deals in investments); (e) article 40 (safeguarding and administering investments); (f) article 61 (entering into regulated mortgage contracts). (269BC) (1) This section contains definitions of terms used in sections 269B to 269BB (and this section). (2) “Asset management activities” means activities which consist (or, if they were carried on in the United Kingdom, would consist) of any or all of the following— (a) acting as the operator of a collective investment scheme (within the meaning of Part 17 of FISMA 2000: see sections 235 and 237 of that Act), (b) acting as a discretionary investment manager for clients none of which is a linked entity (see subsection (3)), and (c) acting as an authorised corporate director. (3) In subsection (2)(b) “linked entity”, in relation to an entity (“E”), means— (a) a member of the same group as E, (b) a company in which a company which is a member of the same group as E has a major interest (within the meaning of Part 5 of CTA 2009: see section 473 of that Act), or (c) a partnership the members of which include an entity— (i) which is a member of the same group as E, and (ii) whose share of the profits or losses of a trade carried on by the partnership for an accounting period of the partnership any part of which falls within the relevant accounting period is at least a 40% share (see Part 17 of CTA 2009 for provisions about shares of partnership profits and losses). “The relevant accounting period” means the accounting period referred to in section 269B(3). (4) “Building society” has the same meaning as in the Building Societies Act 1986. (5) “Insurance company” and “insurance special purpose vehicle” have the meanings given by sections 65 and 139 of FA 2012 respectively. (6) “Partnership” includes— (a) a limited liability partnership, and (b) an entity established under the law of a territory outside the United Kingdom of a similar character to a partnership, and “member”, in relation to a partnership, is to be read accordingly. (7) The terms in subsection (8)— (a) in relation to a PRA-authorised person, have the meaning given by the PRA Handbook; (b) in relation to any other authorised person, have the meaning given by the FCA Handbook. (8) The terms referred to in subsection (7) are— - “authorised corporate director”; - “BIPRU 730k firm”; - “contracts for differences”; - “discretionary investment manager”; - “exempt BIPRU commodities firm”; - “exempt IFPRU commodities firm”; - “full scope BIPRU investment firm”; - “full scope IFPRU investment firm”; - “IFPRU 730k firm”; - “pension scheme”; - “principal”; - “retail client”. (9) A company or partnership which would be a BIPRU 730k firm and a full scope BIPRU investment firm by virtue of activities carried on in the United Kingdom but for the fact that its registered office (or, if it does not have a registered office, its head office) is not in the United Kingdom is to be treated as being one for the purposes of section 269B. (10) A company or partnership which would be an IFPRU 730k firm and a full scope IFPRU investment firm by virtue of activities carried on in the United Kingdom but for the fact that its registered office (or, if it does not have a registered office, its head office) is not in the United Kingdom is to be treated as being one for the purposes of section 269B. (11) In subsection (7)— - “authorised person” and “PRA-authorised person” have the same meaning as in FISMA 2000; - “the FCA Handbook” means the Handbook made by the Financial Conduct Authority under FISMA 2000 (as that Handbook has effect from time to time); - “the PRA Handbook” means the Handbook made by the Prudential Regulation Authority under FISMA 2000 (as that Handbook has effect from time to time). (269BD) (1) In this Part “group” means a group for the purposes of— (a) those provisions of international accounting standards relating to the preparation of consolidated financial statements (whether or not the company that is the parent within the meaning of those provisions (“the parent company”) prepares financial statements under those standards), or (b) in a case where subsection (2) applies, those provisions of US GAAP which relate to the preparation of consolidated financial statements. (2) This subsection applies if— (a) as at the end of a period of account of the parent company— (i) the parent company is resident in a territory outside the United Kingdom, (ii) generally accepted accounting practice for companies resident in that territory is or includes US GAAP, and (iii) the parent company is a parent for the purposes of those provisions of US GAAP which relate to the preparation of consolidated financial statements (as well as being a parent for the purposes of the provisions mentioned in subsection (1)(a)), and (b) the parent company prepares consolidated financial statements for the period of account under US GAAP. (3) Accordingly, for the purposes of this Part a company is a member of a group if— (a) it is the parent company in relation to the group, or (b) it is a member of the group for the purposes of the provisions mentioned in subsection (1)(a) or (b) (as the case may be). (4) In this section “US GAAP” means United States Generally Accepted Accounting Principles. (5) Section 1127(1) and (3) (meaning of “generally accepted accounting practice”) do not apply for the purposes of this section. (269BE) (1) The Treasury may by regulations make such amendments of this Part as they consider appropriate in consequence of— (a) any change made to, or replacement of, the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 (S.I. 2001/544) (or any replacement); (b) any change made to, or replacement of, the FCA Handbook or the PRA Handbook (or any replacement); (c) any change in international accounting standards or US GAAP; (d) any regulatory requirement, or change to any regulatory requirement, imposed by EU legislation, or by or under any Act (whenever adopted, enacted or made). (2) In this section— - “the FCA Handbook” and “the PRA Handbook” have the meaning given by section 269BC(11); - “US GAAP” has the meaning given by section 269BD(4). (269C) (1) This Chapter contains provision restricting the amount of certain deductions which a banking company may make in calculating its taxable total profits for an accounting period. (2) Sections 269CA to 269CD contain the restrictions. (3) Sections 269CE to 269CH contain exceptions to the restrictions. (4) Section 269CK contains anti-avoidance provision. (5) Sections 269CL to 269CN contain supplementary provision and definitions. (6) For the meaning of “banking company”, see section 269B. (269CA) (1) This section has effect for determining the taxable total profits of a banking company for an accounting period. (2) Any deduction made by the company for the accounting period in respect of a pre-2015 carried-forward trading loss may not exceed 50% of the company's relevant trading profits for the accounting period. Section 269CD contains provision for calculating a company's relevant trading profits for an accounting period (see step 5 in subsection (1) of that section). (3) But subsection (2) does not apply where the amount given by step 1 in section 269CD(1) is not greater than nil. (4) In this Chapter “pre-2015 carried-forward trading loss”, in relation to a company and an accounting period (“the current accounting period”), means a loss which— (a) was made in a trade of the company in an accounting period ending before 1 April 2015, and (b) is carried forward to the current accounting period under section 45 (carry forward of trade loss against subsequent trade profits). (5) See also sections 269CE to 269CH (losses to which restrictions do not apply). (269CB) (1) This section has effect for determining the taxable total profits of a banking company for an accounting period. (2) Any deduction made by the company for the accounting period in respect of a pre-2015 carried-forward non-trading deficit may not exceed 50% of the company's relevant non-trading profits for the accounting period. Section 269CD contains provision for calculating a company's relevant non-trading profits for an accounting period (see step 6 in subsection (1) of that section). (3) But subsection (2) does not apply where the amount given by step 1 in section 269CD(1) is not greater than nil. (4) In this Chapter “pre-2015 carried-forward non-trading deficit”, in relation to a company and an accounting period (“the current accounting period”), means a non-trading deficit— (a) which the company had from its loan relationships under section 301(6) of CTA 2009 for an accounting period ending before 1 April 2015, and (b) which is carried forward under section 457 of that Act (carry forward of deficits to accounting periods after deficit period) to be set off against non-trading profits of the current accounting period. (5) In subsection (4) “non-trading profits” has the same meaning as in section 457 of CTA 2009. (6) See also sections 269CE to 269CH (losses to which restrictions do not apply). (269CC) (1) This section has effect for determining the taxable total profits of a banking company for an accounting period. (2) Any deduction made by the company for the accounting period in respect of pre-2015 carried-forward management expenses may not exceed the relevant maximum (see subsection (7)). (3) But subsection (2) does not apply where the amount given by step 1 in section 269CD(1) is not greater than nil. (4) In this Chapter “pre-2015 carried-forward management expenses”, in relation to a company and an accounting period (“the current accounting period”), means amounts falling within subsection (5) or (6). See also sections 269CE to 269CH (losses to which restrictions do not apply). (5) The amounts within this subsection are amounts— (a) which fall within subsection (2) of section 1223 of CTA 2009 (carrying forward expenses of management and other amounts), (b) which— (i) for the purposes of Chapter 2 of Part 16 of CTA 2009 are referable to an accounting period ending before 1 April 2015, or (ii) in the case of qualifying charitable donations, were made in such an accounting period, and (c) which are treated by section 1223(3) of CTA 2009 as expenses of management deductible for the current accounting period. (6) The amounts within this subsection are amounts of loss which— (a) were made in an accounting period ending before 1 April 2015, and (b) are treated by section 63(3) (carrying forward certain losses made by company with investment business which ceases to carry on UK property business) as expenses of management deductible for the current accounting period for the purposes of Chapter 2 of Part 16 of CTA 2009. (7) The relevant maximum is determined as follows— - Step 1 Calculate 50% of the company's relevant profits for the accounting period. Section 269CD contains provision for calculating a company's relevant profits for an accounting period. - Step 2 Calculate the sum of any deductions made by the company for the accounting period which are— 1. deductions in respect of a pre-2015 carried-forward trading loss, or 2. deductions in respect of a pre-2015 carried-forward non-trading deficit. - Step 3 The relevant maximum is the difference between the amount given by step 1 and the amount given by step 2. If the amount given by step 1 does not exceed the amount given by step 2, the relevant maximum is nil. (269CD) (1) To determine a company's relevant profits for an accounting period— - Step 1 Calculate the company's total profits for the accounting period, ignoring any pre-2015 carried-forward trading losses or pre-2015 carried-forward non-trading deficits. (If the amount given by this step is not greater than nil, no further steps are to be taken: see sections 269CA(3), 269CB(3) and 269CC(3).) - Step 2 Divide the amount given by step 1 into profits that are profits of a trade of the company (the company's “trade profits”) and profits that are not profits of a trade of the company (the company's “non-trading profits”). - Step 3 Calculate the proportion (“the trading proportion”) of the amount given by step 1 that consists of the company's trade profits and the proportion (“the non-trading proportion”) of that amount that consists of its non-trading profits. - Step 4 Calculate the sum of any amounts which can be relieved against the company's total profits for the accounting period (as calculated in accordance with step 1), ignoring the amount of any excluded deductions for the accounting period (see subsection (2)). - Step 5 Deduct the trading proportion of the amount given by step 4 from the company's trade profits for the accounting period. The amount given by this step is the company's relevant trading profits for the accounting period. If the amount given by this step is not greater than nil, the company's relevant trading profits for the accounting period are nil. - Step 6 Deduct the non-trading proportion of the amount given by step 4 from the company's non-trading profits for the accounting period. The amount given by this step is the company's relevant non-trading profits for the accounting period. If the amount given by this step is not greater than nil, the company's relevant non-trading profits for the accounting period are nil. - Step 7 The company's relevant profits for the accounting period are the sum of its relevant trading profits for the accounting period and its relevant non-trading profits for the accounting period. (2) The following are “excluded deductions” in relation to an accounting period (“the current accounting period”)— (a) a deduction made in respect of pre-2015 carried-forward management expenses; (b) a deduction for relief under section 37 (relief for trade losses against total profits) in relation to a loss made in an accounting period after the current accounting period; (c) a deduction for relief under section 260(3) of CAA 2001 (special leasing of plant or machinery: carry-back of excess allowances) in relation to capital allowances for an accounting period after the current accounting period; (d) a deduction for relief under section 459 of CTA 2009 (non-trading deficits from loan relationships) in relation to a deficit for a deficit period after the current accounting period. (269CE) (1) In this section “the first banking accounting period”, in relation to a company, means the accounting period in which the company first begins to carry on a relevant regulated activity. (2) References in this Chapter to a pre-2015 carried-forward trading loss do not include a loss which was made in a trade of a company in an accounting period ending before the first banking accounting period. (3) References in this Chapter to a pre-2015 carried-forward non-trading deficit do not include a non-trading deficit which a company had from its loan relationships under section 301(6) of CTA 2009 for an accounting period ending before the first banking accounting period. (4) References in this Chapter to pre-2015 carried-forward management expenses, in relation to a company, do not include— (a) any amounts falling within section 269CC(5) which— (i) for the purposes of Chapter 2 of Part 16 of CTA 2009 are referable to an accounting period ending before the first banking accounting period, or (ii) in the case of qualifying charitable donations, were made in an accounting period ending before the first banking accounting period, or (b) any amounts of loss falling within section 269CC(6) which were made in an accounting period ending before the first banking accounting period. (5) Section 269CL contains provision for determining when a company first begins to carry on a relevant regulated activity. (269CF) (1) References in this Chapter to a pre-2015 carried-forward trading loss do not include a loss which was made in a trade of a company in an accounting period ending in the company's start-up period. (2) References in this Chapter to a pre-2015 carried-forward non-trading deficit do not include a non-trading deficit which a company had from its loan relationships under section 301(6) of CTA 2009 for an accounting period ending in the company's start-up period. (3) References in this Chapter to pre-2015 carried-forward management expenses, in relation to a company, do not include— (a) any amounts falling within section 269CC(5) which— (i) for the purposes of Chapter 2 of Part 16 of CTA 2009 are referable to an accounting period ending in the company's start-up period, or (ii) in the case of qualifying charitable donations, were made in such an accounting period, or (b) any amounts of loss falling within section 269CC(6) which were made in an accounting period ending in the company's start-up period. (4) For the purposes of this Chapter any amounts which, by virtue of subsections (1) to (3), are not relevant carried-forward losses of a company are to be regarded as having been taken into account in determining the taxable total profits of the company for accounting periods ending before 1 April 2015 before any amounts which are relevant carried-forward losses of the company. (5) Subsection (6) applies where a company has an accounting period (“the straddling period”) beginning before, and ending after, the last day of its start-up period. (6) For the purposes of this section— (a) so much of the straddling period as falls within the start-up period, and so much of the straddling period as falls outside the start-up period, are treated as separate accounting periods, and (b) any relevant carried-forward losses of the company for the straddling period are apportioned to the two separate accounting periods— (i) in accordance with section 1172 (time basis), or (ii) if that method would produce a result that is unjust or unreasonable, on a just and reasonable basis. (7) In subsection (6)(b) the reference to any relevant carried-forward losses of the company “for” the straddling period is a reference to— (a) any pre-2015 carried-forward trading loss which was made in a trade of the company in the straddling period, (b) any pre-2015 carried-forward non-trading deficit which the company had from its loan relationships for the straddling period, and (c) any pre-2015 carried-forward management expenses which are referable to, or were made in, the straddling period (as the case may be). (8) For provision about determining a company's start-up period, see section 269CG. (269CG) (1) In this Chapter the “start-up period”, in relation to a company (“company C”), means the period of 5 years beginning with the day on which company C first begins to carry on a relevant regulated activity (“the start-up day”). This is subject to the following provisions of this section. (2) If on the start-up day— (a) company C is a member of a group, (b) there are one or more other members of the group that have carried on a relevant regulated activity while a member of the group, and (c) none of those members first began to carry on such an activity more than 5 years before the start-up day, company C's start-up period is the period beginning with the start-up day and ending with the relevant group period. (3) The “relevant group period”, in relation to a group, means the period of 5 years beginning with the earliest day on which any member of the group first began to carry on a relevant regulated activity. (4) If on the start-up day— (a) company C is a member of a group, (b) there are one or more other members of the group that have carried on a relevant regulated activity while a member of the group, and (c) any of those members first began to carry on such an activity more than 5 years before the start-up day, company C does not have a start-up period. (5) This subsection applies if— (a) on a day falling within company C's start-up period (“the relevant day”), company C becomes a member of a group, (b) one or more of the members of the group which on the relevant day carry on a relevant regulated activity first began to do so before the beginning of company C's start-up period, and (c) the relevant regulated activities carried on by company C do not form a significant proportion of the relevant regulated activities carried on immediately after the relevant day by the members of the group as a whole. (6) Where subsection (5) applies, company C's start-up period— (a) in the case where any of the members of the group first began to carry on a relevant regulated activity more than 5 years before the relevant day, ends immediately before the relevant day; (b) in any other case, ends with the relevant group period. (7) This subsection applies if— (a) on a day falling within company C's start-up period (“the relevant day”), another company that carries on a relevant regulated activity (“the new member”) becomes a member of a group of which company C is a member, (b) the new member first began to carry on a relevant regulated activity before the beginning of company C's start-up period, and (c) the relevant regulated activities carried on by the new member form a significant proportion of the relevant regulated activities carried on immediately after the relevant day by the members of the group as a whole. (8) Where subsection (7) applies, company C's start-up period— (a) in the case where the new member first began to carry on a relevant regulated activity more than 5 years before the relevant day, ends immediately before the relevant day; (b) in any other case, ends with the relevant group period. (9) Any reference in this section to being, or becoming, a member of a group includes a reference to being, or becoming, a member of a partnership; and references to the “relevant group period” are to be read accordingly. (10) Section 269CL contains provision for determining when a company first begins to carry on a relevant regulated activity. (269CH) (1) This section applies to a banking company if— (a) it is a building society, or (b) an amount of carried-forward loss allowance is allocated to the company by a building society in accordance with section 269CI or 269CJ. (2) If a banking company to which this section applies has an amount of carried-forward loss allowance (see subsection (5)), the company may designate as unrestricted losses any losses which, in relation to any accounting period, would (in the absence of this section) be relevant carried-forward losses. (3) A loss designated under this section as an unrestricted loss is to be treated for the purposes of this Chapter as if it were not a relevant carried-forward loss. (4) The amount of losses which a company may designate at any time must not exceed the amount of carried-forward loss allowance which the company has at that time. (5) The amount of carried-forward loss allowance which a company has at any time is the difference between the company's maximum available carried-forward loss allowance and the total amount of losses designated by the company under this section before that time. (6) The “maximum available carried-forward loss allowance” is— (a) in the case of a building society which has not made an allocation under section 269CI, £25,000,000; (b) in the case of a building society which has made an allocation under section 269CI, the amount given by— $$( A − B ) + C$where—A is £25,000,000,B is the sum of—any amounts which it has allocated to another company under section 269CI, andany amounts allocated to another company under section 269CJ which immediately before the allocation were amounts of carried-forward loss allowance which the building society had, andC is the sum of any amounts allocated to the building society under section 269CJ;$ (c) in the case of any other company, the total amount of carried-forward loss allowance allocated to the company under section 269CI or 269CJ. (7) References in this Chapter to an amount of carried-forward loss allowance allocated to a company are references to an amount allocated to the company under section 269CI or 269CJ. (8) For the meaning of “relevant carried-forward loss”, see section 269CN. (9) For information about the procedure for making a designation under this section, see Schedule 18 to FA 1998, in particular Part 9E of that Schedule. (269CI) (1) This section applies where a building society— (a) is a member of a group, and (b) has an amount of carried-forward loss allowance (see section 269CH(5)). (2) The building society may allocate some or all of that amount of carried-forward loss allowance to any other member of the group which is a banking company. (3) Where a building society makes an allocation under subsection (2), it must give HMRC a statement (a “statement of allocation”) which specifies— (a) the amount of carried-forward loss allowance which the building society had immediately before it made the allocation, (b) the companies (“the relevant companies”) to which an amount of carried-forward loss allowance has been allocated, (c) the amount of carried-forward loss allowance allocated to each of the relevant companies, and (d) the total amount of carried-forward loss allowance allocated by the building society. (4) The statement of allocation must be given to HMRC on or before— (a) the first day after the allocation on which the building society, or any of the relevant companies, delivers a company tax return which includes a designation made under section 269CH, or (b) if earlier, the first day after the allocation on which a company tax return of the building society, or any of the relevant companies, is amended so as to include such a designation. This is subject to subsection (5). (5) An officer of Revenue and Customs may provide that the statement of allocation may be given to HMRC on or before a later day specified by the officer. (6) An allocation made under subsection (2) is not effective unless the requirements of this section have been complied with. (7) A statement of allocation that has been given to HMRC under this section may not be amended or withdrawn. This is subject to section 269CJ. (269CJ) (1) This section applies where— (a) a building society is a member of a group, (b) the building society has given HMRC a statement of allocation in accordance with section 269CI, (c) the building society, or any other member of the group that is a banking company, (the “designating company”) would, if it had an amount (or an additional amount) of carried-forward loss allowance, be able to designate an amount of losses under section 269CH equal to that amount, and (d) that amount is greater than the amount of carried-forward loss allowance which the building society could allocate under section 269CI. (2) In this section the “available carried-forward loss allowance” means the total of any amounts of carried-forward loss allowance which any member of the group, other than the designating company, has (see section 269CH(5)). (3) The building society may— (a) allocate some or all of the available carried-forward loss allowance to the designating company, and (b) provide that, to the extent that any of the amount allocated to the designating company under this subsection is an amount of carried-forward loss allowance which, immediately before the allocation, was an amount allocated to another company, that amount is no longer allocated to that other company. (4) Where a building society makes an allocation under subsection (3), it must give HMRC a statement (a “revised statement of allocation”) which specifies— (a) the amount of the available carried-forward loss allowance immediately before the allocation, (b) the companies which had an amount of carried-forward loss allowance immediately before the allocation, and the amount of carried-forward loss allowance which each of those companies had at that time, and (c) the companies which have an amount of carried-forward loss allowance immediately after the allocation (“the relevant companies”), and the amount of carried-forward loss allowance which each of those companies has. (5) The revised statement of allocation must be given to HMRC on or before— (a) the first day after the allocation on which any of the relevant companies delivers a company tax return which includes a designation made under section 269CH, or (b) if earlier, the first day after the allocation on which a company tax return of any of the relevant companies is amended so as to include such a designation. This is subject to subsection (6). (6) An officer of Revenue and Customs may provide that the revised statement of allocation may be given to HMRC on or before a later day specified by the officer. (7) An allocation made under subsection (3) is not effective unless the requirements of this section have been complied with. (8) Except as provided for by this section, a revised statement of allocation that has been given to HMRC under this section may not be amended or withdrawn. (269CK) (1) This section applies if conditions A to C are met. (2) Condition A is that— (a) the amount given by step 1 in section 269CD(1) as the total profits of a banking company for an accounting period includes profits which arise to the banking company as a result of any arrangements (“the tax arrangements”), and (b) in the absence of those profits (“the additional profits”) any deduction which the banking company would be entitled to make for the accounting period in respect of any relevant carried-forward losses would be reduced. (3) Condition B is that the main purpose, or one of the main purposes, of the tax arrangements is to secure a relevant corporation tax advantage— (a) for the banking company, or (b) if there are any companies connected with that company, for the banking company and those connected companies (taken together). (4) In this section “relevant corporation tax advantage” means a corporation tax advantage involving— (a) the additional profits, and (b) the deduction of any relevant carried-forward losses from those profits. (5) Condition C is that, at the time when the tax arrangements were entered into, it would have been reasonable to assume that the tax value of the tax arrangements would be greater than the non-tax value of the tax arrangements. (6) The “tax value” of the tax arrangements is the total value of— (a) the relevant corporation tax advantage, and (b) any other economic benefits derived by— (i) the banking company, or (ii) if there are any companies connected with that company, the banking company and those connected companies (taken together), as a result of securing the relevant corporation tax advantage. (7) The “non-tax value” of the tax arrangements is the total value of any economic benefits, other than those falling within subsection (6)(a) or (b), derived by— (a) the banking company, or (b) if there are any companies connected with that company, the banking company and those connected companies (taken together), as a result of the tax arrangements. (8) If this section applies, the additional profits are not to be taken into account in calculating the banking company's relevant profits for the accounting period (see section 269CD). (9) In this section— - “arrangements” includes any agreement, understanding, scheme, transaction or series of transactions (whether or not legally enforceable); - “corporation tax advantage” means— 1. a relief from corporation tax or increased relief from corporation tax, 2. a repayment of corporation tax or increased repayment of corporation tax, 3. the avoidance or reduction of a charge to corporation tax or an assessment to corporation tax, 4. the avoidance of a possible assessment to corporation tax, or 5. the deferral of a payment of corporation tax or advancement of a repayment of corporation tax. (269CL) (1) For the purposes of this Chapter, a company first begins to carry on a relevant regulated activity on a particular day if the company— (a) begins to carry on a relevant regulated activity on that day, and (b) has not carried on any relevant regulated activity before that day. This is subject to subsection (2). (2) Where— (a) there is a transfer of a trade, and (b) immediately before the transfer the predecessor carried on a relevant regulated activity, the successor is to be treated as having first begun to carry on a relevant regulated activity on the day on which the predecessor first began to carry on such an activity. (3) Section 940B (meaning of “transfer of a trade” etc) applies for the purposes of this section as it applies for the purposes of Chapter 1 of Part 22. (269CM) (1) Where a company (“the joint venturer”), together with one or more other persons, jointly controls another company that is a joint venture (“the joint venture company”), the joint venture company is to be treated for the purposes of this Chapter as a member of any group of which the joint venturer is a member. (2) References in subsection (1) to a joint venture and to jointly controlling a company that is a joint venture are to be read in accordance with those provisions of international accounting standards which relate to joint ventures. (269CN) In this Chapter— - “banking company” has the meaning given by section 269B; - “building society” has the same meaning as in the Building Societies Act 1986; - “company tax return” has the same meaning as in Schedule 18 to FA 1998; - “group” has the meaning given by section 269BD; - “HMRC” means Her Majesty's Revenue and Customs; - “partnership” includes— 1. a limited liability partnership, and 2. an entity established under the law of a territory outside the United Kingdom of a similar character to a partnership, - “pre-2015 carried-forward management expenses” has the meaning given by section 269CC(4); - “pre-2015 carried-forward non-trading deficit” has the meaning given by section 269CB(4); - “pre-2015 carried-forward trading loss” has the meaning given by section 269CA(4); - “relevant carried-forward loss” means— 1. a pre-2015 carried-forward trading loss, 2. a pre-2015 carried-forward non-trading deficit, or 3. any pre-2015 carried-forward management expenses; - “relevant non-trading profits”, in relation to a company, means the amount given by step 6 in section 269CD(1); - “relevant profits”, in relation to a company, means the amount given by step 7 in section 269CD(1); - “relevant regulated activity” has the meaning given by section 269BB; - “relevant trading profits”, in relation to a company, means the amount given by step 5 in section 269CD(1); - “start-up period”, in relation to a company, has the meaning given by section 269CG.

PART 2 — Consequential amendments

FA 1998

2

In Schedule 18 to FA 1998 (company tax returns, assessments and related matters), after Part 9D insert—

(83Y) (1) This Part of this Schedule applies to the designation of losses within sub-paragraph (2) as unrestricted losses by a banking company under section 269CH of the Corporation Tax Act 2010 (losses covered by carried-forward loss allowance). (2) The losses mentioned in sub-paragraph (1) are losses which, in relation to any accounting period, would (in the absence of that section) be relevant carried-forward losses. (3) Expressions used in this Part of this Schedule and in Chapter 3 of Part 7A of the Corporation Tax Act 2010 have the same meaning in this Part of this Schedule as they have in that Chapter. (83YA) (1) A designation to which this Part of this Schedule applies must be made by being included in the company's tax return for the accounting period for which the company makes a deduction in respect of the losses. (2) It may be included in the return originally made or by amendment. (83YB) Where a company designates any relevant carried-forward loss in a company tax return, the return must specify— (a) the amount of the loss, and (b) whether the loss is— (i) a pre-2015 carried-forward trading loss, (ii) a pre-2015 carried-forward non-trading deficit, or (iii) pre-2015 carried-forward management expenses. (83YC) A designation to which this Part of this Schedule applies may be amended or withdrawn by the company only by amending its company tax return.

CTA 2009

3

In section 1223 of CTA 2009 (carrying forward expenses of management and other amounts), in subsection (1)—

(a) the words after “because” become paragraph (a), and

(b) after that paragraph insert

, or (b) in the case of amounts falling within subsection (2)(c), section 269CC of CTA 2010 (restriction on deductions for management expenses) has effect for the accounting period.

CTA 2010

4

In section 1 of CTA 2010 (overview of Act), in subsection (3)—

(a) for “Parts 8” substitute “ Parts 7A ”, and

(b) before paragraph (a) insert—

(za) banking companies (see Part 7A),

5

In Schedule 4 to CTA 2010 (index of defined expressions), at the appropriate place insert—

banking company (in Part 7A)	section 269B

;

building society (in Chapter 3 of Part 7A)	section 269CN

;

company tax return (in Chapter 3 of Part 7A)	section 269CN

;

group (in Part 7A)	section 269BD

;

HMRC (in Chapter 3 of Part 7A)	section 269CN

;

partnership (in Chapter 3 of Part 7A)	section 269CN

;

pre-2015 carried-forward management expenses (in Chapter 3 of Part 7A)	section 269CC(4)

;

pre-2015 carried-forward non-trading deficit (in Chapter 3 of Part 7A)	section 269CB(4)

;

pre-2015 carried-forward trading loss (in Chapter 3 of Part 7A)	section 269CA(4)

;

relevant carried-forward loss (in Chapter 3 of Part 7A)	section 269CN

;

relevant non-trading profits (in Chapter 3 of Part 7A)	section 269CN

;

relevant profits (in Chapter 3 of Part 7A)	section 269CN

;

relevant regulated activity (in Part 7A)	section 269BB

;

relevant trading profits (in Chapter 3 of Part 7A)	section 269CN

;

start-up period (in Chapter 3 of Part 7A)	section 269CG

TIOPA 2010

6

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

PART 3 — Commencement and anti-forestalling provision

Commencement

7

(1) The amendments made by paragraphs 1 to 5 of this Schedule have effect for the purposes of calculating the taxable total profits of companies for accounting periods beginning on or after 1 April 2015.

(2) But section 269CK of CTA 2010 (inserted by this Schedule) does not have effect in relation to any arrangements made before 3 December 2014.

(3) Sub-paragraph (4) applies where a company has an accounting period beginning before 1 April 2015 and ending on or after that date (“the straddling period”).

(4) For the purposes of Chapter 3 of Part 7A of CTA 2010—

(a) so much of the straddling period as falls before 1 April 2015, and so much of that period as falls on or after that date, are treated as separate accounting periods, and

(b) the profits or losses of the company for the straddling period are apportioned to the two separate accounting periods—

(i) in accordance with section 1172 of CTA 2010 (time basis), or

(ii) if that method would produce a result that is unjust or unreasonable, on a just and reasonable basis.

8

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

Anti-forestalling provision

9

(1) This sub-paragraph applies if—

(a) for the purposes of corporation tax a banking company has profits (“pre-commencement profits”) for an accounting period ending before 1 April 2015,

(b) in the absence of this paragraph the banking company would, for corporation tax purposes, be entitled to deduct from the pre-commencement profits for the accounting period an amount in respect of any relevant carried-forward losses,

(d) the main purpose, or one of the main purposes, of the arrangements is to secure a corporation tax advantage as a result of the fact that Chapter 3 of Part 7A of CTA 2010 (inserted by this Schedule) is not to have effect for the accounting period for which the deduction would be made.

(2) If sub-paragraph (1) applies, the banking company is not entitled to deduct from the pre-commencement profits any amount in respect of the relevant carried-forward losses.

(3) Sub-paragraph (1) does not apply in relation to a banking company which falls within section 269B(5)(b) of CTA 2010 (inserted by this Schedule).

(4) In this paragraph—

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

“corporation tax advantage” means—a relief from corporation tax or increased relief from corporation tax,a repayment of corporation tax or increased repayment of corporation tax,the avoidance or reduction of a charge to corporation tax or an assessment to corporation tax,the avoidance of a possible assessment to corporation tax, orthe deferral of a payment of corporation tax or advancement of a repayment of corporation tax.

(5) Terms used in this paragraph and in Chapter 3 of Part 7A of CTA 2010 have the same meaning in this paragraph as in that Chapter; and, so far as necessary for the purposes of this sub-paragraph, that Part is to be treated as having come into force on the same day as this paragraph.

(6) This paragraph is treated as having come into force on 3 December 2014.

(7) Sub-paragraph (8) applies where a company has an accounting period beginning before 1 April 2015 and ending on or after that date (“the straddling period”).

(8) For the purposes of this paragraph—

(a) so much of the straddling period as falls before 1 April 2015, and so much of that period as falls on or after that date, are treated as separate accounting periods, and

(b) the profits or losses of the company for the straddling period are apportioned to the two separate accounting periods—

(i) in accordance with section 1172 of CTA 2010 (time basis), or

(ii) if that method would produce a result that is unjust or unreasonable, on a just and reasonable basis.

SCHEDULE 3

PART 1 — Amendments of CTA 2010

1

In CTA 2010, after Part 14A insert—

(730E) (1) This Part makes provision restricting the circumstances in which a company may make a deduction in respect of a relevant carried-forward loss. (2) For the meaning of “relevant carried-forward loss”, see section 730F. (730F) (1) In this Part “relevant carried-forward loss” means any of the following— (a) a carried-forward trading loss (see subsection (2)), (b) a carried-forward non-trading deficit (see subsection (3)), (c) any carried-forward management expenses (see subsection (4)). (2) “Carried-forward trading loss”, in relation to a company and an accounting period, means a loss in a trade of the company which is carried forward from a previous accounting period under section 45 (carry forward of trade loss against subsequent trade profits). (3) “Carried-forward non-trading deficit”, in relation to a company and an accounting period, means a non-trading deficit which the company has from its loan relationships under section 301(6) of CTA 2009 and which is carried forward from a previous accounting period under section 457 of that Act (carry forward of deficits to accounting periods after deficit period). (4) “Carried-forward management expenses”, in relation to a company and an accounting period, means— (a) any amounts which— (i) fall within subsection (2) of section 1223 of CTA 2009 (carrying forward expenses of management and other amounts), and (ii) are treated by subsection (3) of that section as expenses of management deductible for the period, and (b) any amounts which are treated by section 63(3) (carrying forward certain losses made by company with investment business which ceases to carry on UK property business) as expenses of management deductible for the period for the purposes of Chapter 2 of Part 16 of CTA 2009. (730G) (1) This section applies if conditions A to E are met. (2) Condition A is that— (a) for the purposes of corporation tax a company has profits (“relevant profits”) for an accounting period, (b) the relevant profits arise to the company as a result of any arrangements (“the tax arrangements”), and (c) in the absence of this section the company (“the relevant company”) would, for corporation tax purposes, be entitled to deduct from the relevant profits for the period an amount in respect of any relevant carried-forward losses. (3) Condition B is that— (a) the relevant company, or a company connected with that company, brings a deductible amount into account as a deduction for an accounting period, and (b) it is reasonable to assume that neither the company, nor any company connected with it, would have brought that amount into account as a deduction for that period but for the tax arrangements. (4) Condition C is that the main purpose, or one of the main purposes, of the tax arrangements is to secure a relevant corporation tax advantage— (a) for the relevant company, or (b) if there are any companies connected with that company, for the relevant company and those connected companies (taken together). (5) In this section “relevant corporation tax advantage” means a corporation tax advantage involving— (a) the deductible amount mentioned in subsection (3), and (b) the deduction of any relevant carried-forward losses from the relevant profits. (6) Condition D is that, at the time when the tax arrangements were entered into, it would have been reasonable to assume that the tax value of the tax arrangements would be greater than the non-tax value of the tax arrangements. (7) The “tax value” of the tax arrangements is the total value of— (a) the relevant corporation tax advantage, and (b) any other economic benefits derived by— (i) the relevant company, or (ii) if there are any companies connected with that company, the relevant company and those connected companies (taken together), as a result of securing the relevant corporation tax advantage. (8) The “non-tax value” of the tax arrangements is the total value of any economic benefits, other than those falling within subsection (7)(a) or (b), derived by— (a) the relevant company, or (b) if there are any companies connected with that company, the relevant company and those connected companies (taken together), as a result of the tax arrangements. (9) Condition E is that the tax arrangements are not arrangements in relation to which section 269CK (banking companies: profits arising from tax arrangements to be disregarded) applies. (10) If this section applies, the relevant company is not entitled to deduct from the relevant profits any amount in respect of the relevant carried-forward losses. (730H) (1) In section 730G— - “arrangements” includes any agreement, understanding, scheme, transaction or series of transactions (whether or not legally enforceable); - “corporation tax advantage” means— 1. a relief from corporation tax or increased relief from corporation tax, 2. a repayment of corporation tax or increased repayment of corporation tax, 3. the avoidance or reduction of a charge to corporation tax or an assessment to corporation tax, 4. the avoidance of a possible assessment to corporation tax, or 5. the deferral of a payment of corporation tax or advancement of a repayment of corporation tax; - “deductible amount” means— 1. an expense of a trade, other than an amount treated as such an expense by section 450(a) of CAA 2001 (research and development allowances treated as expenses in calculating profits of a trade), 2. an expense of a UK property business or an overseas property business, 3. an expense of management of a company's investment business within the meaning of section 1219 of CTA 2009, 4. a non-trading debit within the meaning of Parts 5 and 6 of CTA 2009 (loan relationships and derivative contracts) (see section 301(2) of that Act), or 5. a non-trading debit within the meaning of Part 8 of CTA 2009 (intangible fixed assets) (see section 746 of that Act), - “relevant carried-forward loss” has the meaning given by section 730F. (2) References in section 730G to bringing an amount into account “as a deduction” in any period are to bringing it into account as a deduction in that period— (a) in calculating profits, losses or other amounts for corporation tax purposes, or (b) from profits or other amounts chargeable to corporation tax.

2

In section 1 of CTA 2010 (overview of Act), in subsection (4), after paragraph (aa) insert—

(ab) carried-forward losses (see Part 14B),

3

In Schedule 4 to CTA 2010 (index of defined expressions), at the appropriate place insert—

relevant carried-forward loss (in Part 14B)	section 730F

PART 2 — Commencement

4

(1) The amendments made by this Schedule have effect for the purposes of calculating the taxable total profits of companies for accounting periods beginning on or after 18 March 2015.

(2) Sub-paragraph (3) applies where a company has an accounting period beginning before 18 March 2015 and ending on or after that date (“the straddling period”).

(3) For the purposes of Part 14B of CTA 2010—

(a) so much of the straddling period as falls before 18 March 2015, and so much of that period as falls on or after that date, are treated as separate accounting periods, and

(b) any amounts brought into account for the purposes of calculating the taxable total profits of the company for the straddling period are apportioned to the two separate accounting periods—

(i) in accordance with section 1172 of CTA 2010 (time basis), or

(ii) if that method would produce a result that is unjust or unreasonable, on a just and reasonable basis.

SCHEDULE 4

PART 1 — Death benefits for nominees, successors and dependants

Introductory

1

Part 4 of FA 2004 is amended as follows.

Nominees’ annuities and successors’ annuities to be authorised payments

2

(1) Section 167(1) (the pension death benefit rules) is amended as follows.

(2) In pension death benefit rule 3A (payments that may, by way of exception, be made to a nominee) after “other than” insert “a nominees' annuity in respect of a money purchase arrangement or”.

(3) In pension death benefit rule 3B (payments that may, by way of exception, be made to a successor) after “other than” insert “a successors' annuity in respect of a money purchase arrangement or”.

Nominees’ annuities and successors’ annuities: definitions

3

(1) Part 2 of Schedule 28 (interpretation of the pension death benefit rules) is amended as follows.

(2) After paragraph 27A insert—

(27AA) (1) For the purposes of this Part an annuity payable to a nominee is a nominees' annuity if— (a) either— (i) it is purchased together with a lifetime annuity payable to the member and the member becomes entitled to that lifetime annuity on or after 6 April 2015, or (ii) it is purchased after the member's death, the member dies on or after 3 December 2014 and the nominee becomes entitled to the annuity on or after 6 April 2015, (b) it is payable by an insurance company, and (c) it is payable until the nominee's death or until the earliest of the nominee's marrying, entering into a civil partnership or dying. (2) For the purposes of sub-paragraph (1)(a) a nominees' annuity is purchased together with a lifetime annuity if the nominees' annuity is related to the lifetime annuity. (3) The Commissioners for Her Majesty's Revenue and Customs may by regulations make provision in relation to cases in which a nominees' annuity payable to a person (“the original nominees' annuity”) ceases to be payable and in consequence of that— (a) sums or assets (or both) are transferred from the insurance company to another insurance company and are applied— (i) towards the provision of another nominees' annuity (a “new nominees' annuity”) by the other insurance company, or (ii) otherwise, or (b) sums or assets are transferred to the relevant registered pension scheme. (4) The regulations may provide that— (a) in a case where a new nominees' annuity becomes payable, the new nominees' annuity is to be treated, to such extent as is prescribed by the regulations and for such of the purposes of this Part as are so prescribed, as if it were the original nominees' annuity, and (b) in any other case, the relevant registered pension scheme is to be treated as making an unauthorised payment in respect of the member of an amount equal to the aggregate of the sums, and the market value of the assets, transferred. (5) For the purposes of sub-paragraphs (3) and (4) a registered pension scheme is the relevant registered pension scheme if the original nominees' annuity was acquired using sums or assets held for the purposes of the pension scheme.

(3) After paragraph 27F insert—

(27FA) (1) For the purposes of this Part an annuity payable to a successor is a successors' annuity if— (a) the successor becomes entitled to it on or after 6 April 2015, (b) it is payable by an insurance company, (c) it is payable until the successor's death or until the earliest of the successor's marrying, entering into a civil partnership or dying, (d) it is purchased after the death of a dependant, nominee or successor of the member (“the beneficiary”), (e) it is purchased using undrawn funds, and (f) the beneficiary dies on or after 3 December 2014. (2) For the purposes of sub-paragraph (1)(e), sums or assets held for the purposes of an arrangement after the beneficiary's death are undrawn funds if— (a) immediately before the beneficiary's death, they were held for the purposes of the arrangement and, as the case may be, represented (alone or with other sums or assets) the beneficiary's— (i) dependant's flexi-access drawdown fund, (ii) dependant's drawdown pension fund, (iii) nominee's flexi-access drawdown fund, or (iv) successor's flexi-access drawdown fund, in respect of the arrangement, or (b) they arise, or (directly or indirectly) derive, from undrawn funds under paragraph (a) or from sums or assets which so arise or derive. (3) The Commissioners for Her Majesty's Revenue and Customs may by regulations make provision in relation to cases in which a successors' annuity payable to a person (“the original successors' annuity”) ceases to be payable and in consequence of that— (a) sums or assets (or both) are transferred from the insurance company to another insurance company and are applied— (i) towards the provision of another successors' annuity (a “new successors' annuity”) by the other insurance company, or (ii) otherwise, or (b) sums or assets are transferred to the relevant registered pension scheme. (4) The regulations may provide that— (a) in a case where a new successors' annuity becomes payable, the new successors' annuity is to be treated, to such extent as is prescribed by the regulations and for such of the purposes of this Part as are so prescribed, as if it were the original successors' annuity, and (b) in any other case, the relevant registered pension scheme is to be treated as making an unauthorised payment in respect of the member of an amount equal to the aggregate of the sums, and the market value of the assets, transferred. (5) For the purposes of sub-paragraphs (3) and (4) a registered pension scheme is the relevant registered pension scheme if the original successors' annuity was acquired using sums or assets held for the purposes of the pension scheme.

(4) Regulations made before 25 December 2015 under the paragraph 27AA or 27FA inserted by this paragraph may, for cases where the transfer concerned takes place on or after 6 April 2015, include provision having effect in relation to times before the regulations are made.

Dependants’ and nominees’ annuities: testing against deceased member’s lifetime allowance

4

(1) In section 216(1) (benefit crystallisation events and amounts crystallised) the table is amended as follows.

(2) In the second column of the entry relating to benefit crystallisation event 4, after “any related dependants' annuity” insert “and any related nominees' annuity”.

(3) After the entry relating to benefit crystallisation event 5C insert—

5D. A person becoming entitled, on or after 6 April 2015 but before the end of the relevant two-year period, to a dependants' annuity or nominees' annuity in respect of the individual if—the annuity is purchased using (whether or not exclusively) relevant unused uncrystallised funds, andthe individual died on or after 3 December 2014	The aggregate of—the amount of such of the sums, andthe market value of such of the assets,applied to purchase the annuity as are relevant unused uncrystallised funds

5

(1) Section 217 (persons liable to lifetime allowance charge) is amended as follows.

(2) In subsection (2A) (cases where dependant or nominee liable) after “event 5C,” insert “ or by reason of a person becoming entitled to an annuity as mentioned in the description of benefit crystallisation event 5D, ”.

(3) In subsection (4A) (events 5C and 7 are “relevant post-death” events) after “benefit crystallisation event 5C” insert “ , 5D ”.

6

In section 219(7A) (events 5C and 7 are “relevant post-death” events) after “benefit crystallisation event 5C” insert “ , 5D ”.

7

In Schedule 32 (supplementary provisions about benefit crystallisation events)—

(a) in paragraph 1 (meaning of “the relevant pension schemes”: in certain cases means schemes of which the individual was a member immediately before death) after “5C” insert “ or 5D ”,

(b) in paragraph 4(1) (further provision about benefit crystallisation event 4) for the words from “if” to “purchased” substitute

if— (a) the lifetime annuity or a related dependants' annuity or a related nominees' annuity is, or (b) the lifetime annuity and a related dependants' annuity are, or (c) the lifetime annuity and a related nominees' annuity are, or (d) a related dependants' annuity and a related nominees' annuity are, or (e) the lifetime annuity and a related dependants' annuity and a related nominees' annuity are, purchased

(c) in paragraph 14B (event 5C: meaning of “relevant two-year period”), and in the italic heading before that paragraph, for “event 5C” substitute “ events 5C and 5D ”, and

(d) in paragraph 14C(1) (event 5C: meaning of “relevant unused uncrystallised funds”), and in the italic heading before paragraph 14C, for “event 5C” substitute “ events 5C and 5D ”.

Minor and consequential amendments

8

In section 172(6A)(b) (“benefit” in section 172 includes rights to payments under certain annuities) after “lifetime annuity or dependants' annuity” insert “, or nominees' annuity or successors' annuity,”.

9

(1) Section 172A (surrenders of benefits and rights) is amended as follows.

(2) In subsection (1)(aa) (surrender of rights to payments under certain annuities triggers operation of subsection (2)) after “lifetime annuity or dependants' annuity” insert “, or nominees' annuity or successors' annuity,”.

(3) In subsection (9A)(b) (references to benefits include references to rights to payments under certain annuities) after “lifetime annuity or dependants' annuity” insert “, or nominees' annuity or successors' annuity,”.

10

(1) Section 172B (increase of rights of connected person on death) is amended as follows.

(2) In subsection (2)(aa) (relevant member includes person who has rights to payments under certain annuities) after “lifetime annuity or dependants' annuity” insert “, or nominees' annuity or successors' annuity,”.

(3) In subsection (7A) (section does not apply to certain increases in rights) after “dependants' annuity”, in both places, insert “, nominees' annuity, successors' annuity”.

(4) In subsection (7B)(b) (“benefit” in section 172B includes rights to payments under certain annuities) after “lifetime annuity or dependants' annuity” insert “, or nominees' annuity or successors' annuity,”.

11

In section 273B(1) (power of trustees or managers to make certain payments) after paragraph (f) insert—

(fa) paid to purchase a nominees' annuity, (fb) paid to purchase a successors' annuity,

12

In section 280(2) (index of defined expressions) at the appropriate places insert—

nominees' annuity	paragraph 27AA of Schedule 28”
related nominees' annuity	paragraph 3(4B) of Schedule 29
---	---
successors' annuity	paragraph 27FA of Schedule 28
---	---

13

(1) Schedule 28 (interpretation of the pension rules and the pension death benefit rules) is amended as follows.

(2) In paragraph 3(2B)(a) (power to make regulations about cases where lifetime annuity ceases to be payable by insurance company) after “dependants' annuity” insert “, nominees' annuity”.

(3) In paragraph 6(1B)(a) (power to make regulations about cases where short-term annuity ceases to be payable by insurance company) after “dependants' annuity” insert “, nominees' annuity”.

(4) In paragraph 27E(3) (meaning of “unused drawdown funds”)—

(a) in paragraph (b), for “derive.” substitute “ derive, ”, and

(b) after paragraph (b) (but not as part of it) insert—

and since the member's death they have not been designated as available for the payment of dependants' drawdown pension, not been designated as available for the payment of nominees' drawdown pension, not been applied towards the provision of a dependants' annuity, not been applied towards the provision of a nominees' annuity and not been applied towards the provision of a dependants' scheme pension.

(5) In paragraph 27E(4)(b) and (5) (meaning of “unused uncrystallised funds”) after “not been applied towards the provision of a dependants' annuity” insert “, not been applied towards the provision of a nominees' annuity”.

(6) In paragraph 27K(3) (meaning of “unused drawdown funds of the beneficiary's”)—

(a) in paragraph (b) for “derive.” substitute “ derive, ”, and

(b) after paragraph (b) (but not as part of it) insert—

and since the beneficiary's death they have not been designated as available for the payment of successors' drawdown pension and not been applied towards the provision of a successors' annuity.

14

(1) Paragraph 3 of Schedule 29 (interpretation of the lump sum rule: meaning of “the applicable amount”) is amended as follows.

(2) In sub-paragraph (4) (amount applied to purchase certain annuities) after “any related dependants' annuity” insert “and any related nominees' annuity”.

(3) After sub-paragraph (4A) (when a dependants' annuity is related to a lifetime annuity) insert—

(4B) For the purposes of this Part a nominees' annuity is related to a lifetime annuity payable to a member of a registered pension scheme— (a) if they are purchased either in the form of a joint life annuity or separately in circumstances in which the day on which the one is purchased is no earlier than seven days before, and no later than seven days after, the day on which the other is purchased, and (b) the nominees' annuity will be payable to a nominee of the member.

(4) In sub-paragraph (5) (deductions in calculating applicable amount) after “any related dependants' annuity”, in both places, insert “or any related nominees' annuity”.

15

In paragraph 15(2)(a) of Schedule 29 (uncrystallised funds lump sum death benefit is sum paid in respect of funds not spent on certain annuities and other pensions) after “lifetime annuity,” insert “a nominees' annuity,”.

Consequential repeal

16

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Finance Act 2015

Final provisions

Application of other enactments to diverted profits tax

115

Commencement and transitional provision

116

PART 4 — Other provisions

Anti-avoidance

Disclosure of tax avoidance schemes

117

Accelerated payments and group relief

118

Promoters of tax avoidance schemes

119

Penalties in connection with offshore matters and offshore transfers

120

Penalties in connection with offshore asset moves

121

Other tax-related matters

Country-by-country reporting

122

Status for tax purposes of certain bodies

123

Government stock

Redemption of undated government stocks

124

PART 5 — Final provisions

Commencement orders and regulations

125

Interpretation

126

Short title

127

SCHEDULE 1

PART 1 — Amendments of ITEPA 2003

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

PART 2 — Amendments of other enactments

23

24

25

26

SCHEDULE 2

PART 1 — Main provisions

1

PART 2 — Consequential amendments

FA 1998

2

CTA 2009

3

CTA 2010

4

5

TIOPA 2010

6

PART 3 — Commencement and anti-forestalling provision

Commencement

7

8

Anti-forestalling provision