Finance Act 2015

(14B) (1) For the purposes of this Act a disposal made by a person is a “non-resident CGT disposal” if— (a) it is a disposal of a UK residential property interest, and (b) condition A or B is met. But see also subsection (5). (2) Condition A is— (a) in the case of an individual, that the individual is not resident in the United Kingdom for the tax year in question (see subsection (3)), (b) in the case of personal representatives of a deceased person, that the single and continuing body mentioned in section 62(3) is not resident in the United Kingdom, (c) in the case of the trustees of a settlement, that the single person mentioned in section 69(1) is not resident in the United Kingdom during any part of the tax year in question, and (d) in any other case, that the person is not resident in the United Kingdom at the relevant time. (3) In subsection (2)— (a) “the tax year in question” means the tax year in which any gain on the disposal accrues (or would accrue were there to be such a gain); (b) “the relevant time” means the time at which any gain on the disposal accrues (or would accrue were there to be such a gain). (4) Condition B is that— (a) the person is an individual, and (b) any gain accruing to the individual on the disposal would accrue in the overseas part of a tax year which is a split year as respects the individual. (5) A disposal by a person of a UK residential property interest is not a non-resident CGT disposal so far as any chargeable gains accruing to the person on the disposal— (a) would be gains in respect of which the person would be chargeable to capital gains tax— (i) under section 10(1) (non-resident with UK branch or agency), or (ii) under section 2 as a result of subsection (1C) of that section (corresponding provision relating to the overseas part of a split year), or (b) would be gains forming part of the person's chargeable profits for corporation tax purposes by virtue of section 10B (non-resident company with UK permanent establishment). (14C) Schedule B1 gives the meaning in this Act of “disposal of a UK residential property interest”. (14D) (1) A person is chargeable to capital gains tax in respect of any chargeable NRCGT gain accruing to the person in the tax year on a non-resident CGT disposal. See also section 188D(1). (2) Capital gains tax is charged on the total amount of chargeable NRCGT gains accruing to the person in the tax year, after deducting— (a) any allowable losses accruing to the person in the tax year on disposals of UK residential property interests, and (b) so far as they have not been allowed as a deduction from chargeable gains accruing in any previous tax year, any allowable losses accruing to the person in any previous tax year (not earlier than the tax year 1965-66) on disposals of UK residential property interests. (3) In subsection (2), the reference to chargeable NRCGT gains does not include any such gains which accrue to a member of an NRCGT group. (4) The only deductions that can be made from chargeable NRCGT gains to which subsection (2) applies are those permitted by this section. This is subject to section 62(2AA) (carry-back of losses accruing in year of death). (5) See section 57B and Schedule 4ZZB for how to determine— (a) whether an NRCGT gain (or loss) accrues on a non-resident CGT disposal, and (b) the amount of any NRCGT gain (or loss) so accruing. (14E) (1) Subsections (2) to (4) apply in relation to an allowable NRCGT loss accruing to a person in a tax year on a non-resident CGT disposal. (2) The loss is not allowable as a deduction from chargeable gains accruing in any earlier tax year. This is subject to section 62(2) and (2AA) (carry-back of losses accruing in year of death). (3) Relief is not to be given under this Act more than once in respect of the loss or any part of the loss. (4) Relief is not to be given under this Act in respect of the loss if, and so far as, relief has been or may be given in respect of it under the Tax Acts. (14F) (1) A person is not chargeable to capital gains tax under section 14D in respect of a chargeable NRCGT gain accruing to the person on a non-resident CGT disposal if the person— (a) is an eligible person in relation to the disposal, and (b) makes a claim under this section with respect to the disposal. (2) A diversely-held company which makes a non-resident CGT disposal is an eligible person in relation to the disposal. (3) A scheme (see subsection (7)) which makes a non-resident CGT disposal is an eligible person in relation to the disposal if condition A or B is met. (4) Condition A is that the scheme is a widely-marketed scheme throughout the relevant ownership period. (5) Condition B is that— (a) an investor in the scheme is an offshore fund, an open-ended investment company or an authorised unit trust (“the feeder fund”), (b) the scheme is a widely-marketed scheme throughout the alternative period, after taking into account— (i) the scheme documents relating to the feeder fund, and (ii) the intended investors in the feeder fund, and (c) the scheme and the feeder fund have the same manager. (6) A company carrying on life assurance business (as defined in section 56 of the Finance Act 2012) which makes a non-resident CGT disposal is an eligible person if immediately before the time of the disposal the interest in UK land which is the subject of that disposal is held for the purpose of providing benefits to policyholders in the course of that business. (7) In this section “scheme” means any of the following— (a) a unit trust scheme; (b) a company which is an open-ended investment company incorporated by virtue of regulations under section 262 of the Financial Services and Markets Act 2000; (c) a company incorporated under the law of a territory outside the United Kingdom which is, under that law, the equivalent of an open-ended investment company. (8) In this section “the relevant ownership period”, in relation to a scheme, means— (a) the period beginning with the day on which the scheme acquired the interest in UK land which (or part of which) is the subject of the non-resident CGT disposal and ending with the day on which that disposal occurs, or (b) if shorter, the period of 5 years ending with the day on which that disposal occurs. (9) For the purposes of subsection (5), the “alternative period”, in relation to a scheme, is the shorter of— (a) the relevant ownership period, and (b) the period beginning when the feeder fund first became an investor in the scheme and ending with the date of the disposal. (10) In this section— - “diversely-held company” means a company which is not a closely-held company; - “interest in UK land” has the same meaning as in Schedule B1; - “open-ended investment company” has the same meaning as in Part 17 of the Financial Services and Markets Act 2000 (see section 236 of that Act). (11) In Schedule C1— (a) Part 1 sets out the rules for determining whether or not a company is a closely-held company; (b) Part 2 sets out how to determine whether or not a scheme is a widely-marketed scheme at any time. (14G) (1) This section applies where a company which makes a non-resident CGT disposal— (a) is a divided company, and (b) would, without this section, be an eligible person for the purposes of section 14F in relation to the disposal. (2) In determining for the purposes of section 14F whether or not the company is an eligible company in relation to the disposal, the company is to be treated as if it were a closely-held company if the conditions in subsection (3) are met. (3) The conditions are that— (a) the gain or loss accruing on the disposal is primarily or wholly attributable to a particular division of the company, and (b) if that division were a separate company, that separate company would be a closely-held company. (4) For the purposes of this section a company is a “divided company” if, under the law under which the company is formed, under the company's articles of association or other document regulating the company or under arrangements entered into by or in relation to the company— (a) some or all of the assets of the company are available primarily, or only, to meet particular liabilities of the company, and (b) some or all of the members of the company, and some or all of its creditors, have rights primarily, or only, in relation to particular assets of the company. (5) References in this section to a “division” of a divided company are to an identifiable part of the company that carries on distinct business activities and to which particular assets and liabilities of the company are primarily or wholly attributable. (14H) (1) Subsection (2) applies where— (a) arrangements are entered into, and (b) the main purpose, or one of the main purposes, of any party entering into them (or any part of them) is to avoid capital gains tax being charged under section 14D as a result of a person not being an eligible person in relation to the disposal by virtue of subsection (2) (diversely-held companies) or, as the case may be, subsection (3) (widely-marketed schemes) of section 14F (persons not chargeable under section 14D if a claim is made). (2) The arrangements (or that part of the arrangements) are to be disregarded in determining whether or not the company is an eligible person by virtue of that subsection. (3) In this section “arrangements” includes any agreement, understanding, scheme, transaction or series of transactions (whether or not legally enforceable).

12

In section 16 (computation of losses), in subsection (3), for “or 10B,” substitute “ , 10B, 14D or 188D ”.

13

After section 25 insert—

(25ZA) (1) This section applies if, ignoring subsections (3) and (4)— (a) a gain or loss would accrue to a person on a disposal of a UK residential property interest deemed to have been made by virtue of section 25(3), and (b) on the assumptions in subsection (2), that gain or loss would be an NRCGT gain chargeable to, or an NRCGT loss allowable for the purposes of, capital gains tax by virtue of section 14D (see section 57B and Schedule 4ZZB). (2) The assumptions are— (a) the disposal is a non-resident CGT disposal, and (b) if the person is a company, any claim which the company could make under section 14F is made. (3) No gain or loss accrues to the person on that disposal. (4) But, on a subsequent disposal of the whole or part of the interest in UK land which is the subject of the disposal mentioned in subsection (1)(a), the whole or a corresponding part of the gain or loss which would have accrued to the person were it not for subsection (3)— (a) is deemed to accrue to the person (in addition to any gain or loss that actually accrues on that subsequent disposal), and (b) (if that would not otherwise be the case) is to be treated as an NRCGT gain chargeable to, or an NRCGT loss allowable for the purposes of, capital gains tax by virtue of section 14D accruing on a non-resident CGT disposal. (5) A person may make an election for subsections (3) and (4) not to apply in relation to the disposal mentioned in subsection (1)(a). (6) If the person is a company, such an election must be made within 2 years after the day on which the company ceases to carry on a trade in the United Kingdom through a branch or agency. (7) In this section, “interest in UK land” has the meaning given by paragraph 2 of Schedule B1.

14

After section 48 insert—

(48A) (1) This section applies where— (a) a person (“P”) has made a non-resident CGT disposal in relation to which there accrued to P an NRCGT gain chargeable to, or an NRCGT loss allowable for the purposes of, capital gains tax by virtue of section 14D or 188D (“the original disposal”), (b) P acquired a right as the whole or part of the consideration for that disposal, (c) on P's acquisition of the right, there was no corresponding disposal of it, and (d) the right is a right to unascertainable consideration (see subsections (4) to (6)). (2) If P subsequently receives consideration (“the ascertained consideration”) representing the whole or part of the consideration referred to in subsection (1)(d) and condition A in section 14B would have been met in relation to the original disposal had a gain on that disposal accrued at the time of the receipt of the ascertained consideration— (a) the ascertained consideration is treated as not accruing on the disposal of the right, (b) the costs of P's acquisition of the right (or, in the case of a part disposal of the right, those costs so far as referable to the part disposed of) are taken to be nil, and (c) the following steps are taken. - Step 1 Any amount by which the ascertained consideration exceeds the relevant original consideration is treated as consideration (or further consideration) accruing on the original disposal. If the relevant original consideration exceeds the ascertained consideration, the consideration accruing on the original disposal is treated as reduced by the amount of the excess. - Step 2 Compute the difference that the adjustment under step 1 makes to what (if any) NRCGT gain or loss, ATED-related gain or loss or other gain or loss accrues on the original disposal (computing this separately for each type of gain or loss). The difference is “positive” if a loss is decreased (to nil or otherwise) or a gain created or increased. The difference is “negative” if a gain is reduced (to nil or otherwise) or a loss created or increased. - Step 3 Any positive amount computed under step 2 is treated for the purposes of this Act and the Management Act as a gain (of the type appropriate to the computation) accruing to P at the time of the receipt of the ascertained consideration. Any negative amount computed under step 2 is treated for the purposes of this Act and the Management Act as a loss (of the type appropriate to the computation) accruing to P at the time of the receipt of the ascertained consideration. (3) In step 1 in subsection (2), “the relevant original consideration” means the consideration accruing on the original disposal, so far as referable to the right mentioned in subsection (1)(b) (or, in the case of a part disposal of the right, referable to the part disposed of). (4) A right is a right to unascertainable consideration if, and only if— (a) it is a right to consideration the amount or value of which is unascertainable at the time when the right is conferred, and (b) that amount or value is unascertainable at that time on account of its being referable, in whole or in part, to matters which are uncertain at that time because they have not yet occurred. This subsection is subject to subsections (5) and (6). (5) The amount or value of any consideration is not to be regarded as being unascertainable by reason only— (a) that the right to receive the whole or any part of the consideration is postponed or contingent, if the consideration or, as the case may be, that part of it is, in accordance with section 48, brought into account in the computation of the gain accruing to a person on the disposal of an asset, or (b) in a case where the right to receive the whole or any part of the consideration is postponed and is to be, or may be, to any extent satisfied by the receipt of property of one description or property of some other description, that some person has a right to select the property, or the description of property, that is to be received. (6) A right is not to be taken to be a right to unascertainable consideration by reason only that either the amount or the value of the consideration has not been fixed, if— (a) the amount will be fixed by reference to the value, and the value is ascertainable, or (b) the value will be fixed by reference to the amount, and the amount is ascertainable.

15

In section 57A (gains and losses on relevant high value disposals), after subsection (2) insert—

(3) Subsection (2) does not apply where Part 4 of Schedule 4ZZB applies (non-resident CGT disposals which are or involve relevant high value disposals).

16

In Part 2, after Chapter 5 insert—

(57B) (1) Schedule 4ZZB makes provision about the computation of— (a) NRCGT gains or losses, and (b) other gains or losses, on non-resident CGT disposals. (2) For further provision about non-resident CGT disposals and NRCGT gains and losses see sections 14B to 14H and 188D and 188E.

17

• (1) Section 62 (death: general provisions) is amended as follows.

• (2) In subsection (2A), for the words from “are gains” to the end substitute

are— (a) gains that are treated as accruing by virtue of section 87 or 89(2) (read, where appropriate, with section 10A), or (b) NRCGT gains (see section 57B and Schedule 4ZZB).

• (3) After subsection (2A) insert—

(2AA) Where allowable NRCGT losses (see section 57B and Schedule 4ZZB) are sustained by an individual in the year of assessment in which the individual dies, the losses may, so far as they cannot be deducted from chargeable gains accruing to the individual in that year, be deducted from any gains such as are mentioned in subsection (2A)(b) that accrued to the deceased in the 3 years of assessment preceding the year of assessment in which the death occurs, taking chargeable gains accruing in a later year before those accruing in an earlier year.

18

After section 80 insert—

(80A) (1) Subsection (2) applies if, ignoring subsections (2) to (4)— (a) a gain or loss would accrue to the trustees of a settlement on a disposal of a UK residential property interest deemed to have been made by virtue of section 80(2), and (b) on the assumption that the disposal is a non-resident CGT disposal, that gain or loss would be a chargeable NRCGT gain or an allowable NRCGT loss (see section 57B and Schedule 4ZZB). (2) The trustees may elect for subsections (3) and (4) to have effect. (3) No gain or loss accrues to the trustees on that disposal. (4) But, on a subsequent disposal of the whole or part of the interest in UK land which is the subject of the disposal mentioned in subsection (1)(a), the whole or a corresponding part of the gain or loss which would have accrued to the trustees were it not for subsection (3)— (a) is deemed to accrue to the trustees (in addition to any gain or loss that actually accrues on that subsequent disposal), and (b) (if that would not otherwise be the case) is to be treated as a chargeable NRCGT gain or an allowable NRCGT loss accruing on a non-resident CGT disposal. (5) In this section, “interest in UK land” has the meaning given by paragraph 2 of Schedule B1.

19

In section 86 (attribution of gains to settlors with interest in non-resident or dual-resident settlements), after subsection (4) insert—

(4ZA) Where a disposal of any settled property (which would apart from this subsection meet the condition in subsection (1)(e) with respect to the tax year) is a non-resident CGT disposal— (a) any chargeable gain or allowable loss accruing on the disposal, other than an NRCGT gain chargeable to, or an NRCGT loss allowable for the purposes of, capital gains tax by virtue of section 14D, is to be treated as if it were a chargeable gain or (as the case requires) allowable loss falling to be taken into account in calculating the amount mentioned in subsection (1)(e) for the tax year, and (b) the disposal is otherwise to be disregarded for the purposes of subsection (1)(e).

20

In section 87 (non-UK resident settlements: attribution of gains to beneficiaries), after subsection (5) insert—

(5A) For the purpose of determining the section 2(2) amount for a settlement for a tax year— (a) any chargeable gain or allowable loss accruing in that tax year on a non-resident CGT disposal made (or treated as made) by the trustees, other than an NRCGT gain chargeable to, or an NRCGT loss allowable for the purposes of, capital gains tax by virtue of section 14D, is to be treated as if it were a chargeable gain or (as the case requires) allowable loss falling to be taken into account in calculating the amount mentioned in subsection (4)(a), and (b) such a disposal is otherwise to be disregarded.

21

• (1) Section 139 (reconstruction involving transfer of business) is amended as follows.

• (2) In subsection (1A)—

• (a) in paragraph (a), after “chargeable assets” insert “ or NRCGT assets ”;

• (b) in paragraph (b), after “chargeable assets” insert “ or NRCGT assets ”.

• (3) After subsection (1A) insert—

(1AA) For the purposes of subsection (1A), an asset is an “NRCGT asset” in relation to a company at any time if— (a) the disposal of the asset by the company at that time would be a non-resident CGT disposal, and (b) the company would not be, in relation to that disposal, an eligible person (as defined in section 14F).

22

After section 159 insert—

(159A) (1) Section 152 does not apply in relation to a person who would (apart from that section) be chargeable to capital gains tax under section 14D or 188D in respect of NRCGT gains accruing on the disposal of the old assets, unless the new assets are qualifying residential property interests immediately after the time they are acquired. (2) For the purposes of this section an asset is a “qualifying residential property interest” at any time if it— (a) is an interest in UK land, and (b) consists of or includes a dwelling. (3) In this section— (a) “dwelling” has the meaning given by paragraph 4 of Schedule B1; (b) “interest in UK land” has the meaning given by paragraph 2 of Schedule B1; (c) “the old assets” and “the new assets” have the same meaning as in section 152; (d) the reference to disposal of the old assets includes a reference to disposal of an interest in them; (e) the reference to acquisition of the new assets includes a reference to acquisition of an interest in them or entering into an unconditional contract for the acquisition of them.

23

• (1) Section 165 (relief for gifts of business assets) is amended as follows.

• (2) In subsection (1), after “167,” insert “ 167A, ”.

• (3) After subsection (7) insert—

(7A) Subsections (7B) and (7C) apply in any case where— (a) the disposal is a non-resident CGT disposal, and (b) the transferee is resident in the United Kingdom. (7B) Subsections (4) and (6) have effect in relation to the disposal as if the references to “chargeable gain” were references to “chargeable NRCGT gain”. (7C) Subsection (7) has effect in relation to the disposal as if the reference to “the excess referred to in paragraph (b) above” were a reference to “the chargeable NRCGT gain which, ignoring this section and section 17(1), would accrue to the transferor on the disposal”.

24

In section 166 (gifts to non-residents), in subsection (1), for “Section 165(4)” substitute “ Subject to section 167A, section 165(4) ”.

25

In section 167 (gifts to foreign-controlled companies), in subsection (1), for “Section 165(4)” substitute “ Subject to section 167A, section 165(4) ”.

26

After section 167 insert—

(167A) (1) This section applies where the disposal in relation to which a claim could be made under section 165 is a disposal of a UK residential property interest to a transferee who is not resident in the United Kingdom and, ignoring section 165— (a) a gain would accrue to the transferor on the disposal, and (b) on the assumption that the disposal is a non-resident CGT disposal (whether or not that is the case), that gain would be a chargeable NRCGT gain (see section 57B and Schedule 4ZZB). (2) Section 165(4) has effect in relation to the disposal as if it read— (4) Where a claim for relief is made under this section in respect of the disposal, the amount of any chargeable gain which, apart from this section, would accrue to the transferor on the disposal, shall be reduced by an amount equal to the held-over gain on the disposal. (3) Where the disposal is a non-resident CGT disposal— (a) section 165(4), as modified by subsection (2) of this section, has effect in relation to the disposal as if the reference to “chargeable gain” were a reference to “chargeable NRCGT gain”, (b) section 165(6) has effect in relation to the disposal as if the references to “chargeable gain” were references to “chargeable NRCGT gain”, and (c) section 165(7) has effect in relation to the disposal as if the reference to “the excess referred to in paragraph (b) above” were a reference to “the chargeable NRCGT gain which, ignoring this section and section 17(1), would accrue to the transferor on the disposal”. (4) Where a claim for relief is made under section 165 in relation to the disposal mentioned in subsection (1), on a subsequent disposal by the transferee of the whole or part of the interest in UK land which is the subject of the disposal mentioned in subsection (1), the whole or a corresponding part of the held-over gain (see section 165(6))— (a) is deemed to accrue to the transferee (in addition to any gain or loss that actually accrues on that subsequent disposal), and (b) (if that would not otherwise be the case) is to be treated as an NRCGT gain chargeable to capital gains tax by virtue of section 14D accruing on a non-resident CGT disposal. (5) Where the subsequent disposal mentioned in subsection (4) is (or proves to be) a chargeable transfer for inheritance tax purposes, section 165(10) has effect in relation to the disposal as if— (a) the reference to “the chargeable gain accruing to the transferee on the disposal of the asset” were a reference to the chargeable gain accruing on the disposal as computed apart from subsection (4), and (b) the reference in section 165(10)(b) to “the chargeable gain” were a reference to— (i) the chargeable gain chargeable to capital gains tax by virtue of any provision of this Act accruing on the disposal, and (ii) the held-over gain deemed to accrue under subsection (4). (6) In this section, “interest in UK land” has the meaning given by paragraph 2 of Schedule B1.

27

In section 168 (emigration of donee), in subsection (1), after paragraph (a) insert—

(aa) the transferee is resident in the United Kingdom at the time of that disposal; and

.

28

After section 168 insert—

(168A) (1) Subsection (2) applies if, ignoring subsections (2) to (4)— (a) a gain would accrue to a transferee on a disposal of a UK residential property interest deemed to have been made by virtue of section 168(1), and (b) on the assumption that the disposal is a non-resident CGT disposal, that gain would be an NRCGT gain chargeable to capital gains tax by virtue of section 14D (see section 57B and Schedule 4ZZB). (2) The transferee may elect for subsections (3) and (4) to have effect. (3) The held-over gain (within the meaning of section 165 or 260) does not accrue to the transferee on that disposal. (4) But, on a subsequent disposal of the whole or part of the interest in UK land which is the subject of the disposal mentioned in subsection (1)(a), the whole or a corresponding part of the held-over gain which would have accrued to the transferee were it not for subsection (3)— (a) is deemed to accrue to the transferee (in addition to any gain or loss that actually accrues on that subsequent disposal), and (b) (if that would not otherwise be the case) is to be treated as an NRCGT gain chargeable to capital gains tax by virtue of section 14D accruing on a non-resident CGT disposal. (5) In this section, “interest in UK land” has the meaning given by paragraph 2 of Schedule B1.

29

After section 187A insert—

(187B) (1) This section applies if, ignoring subsections (3) and (4)— (a) a gain or loss would accrue to a company on a disposal of a UK residential property interest deemed to have been made by virtue of section 185(2), and (b) on the assumptions in subsection (2), that gain or loss would be an NRCGT gain chargeable to, or an NRCGT loss allowable for the purposes of, capital gains tax by virtue of section 14D or 188D (see section 57B and Schedule 4ZZB). (2) The assumptions are that— (a) the disposal is a non-resident CGT disposal, and (b) any claim which the company could make under section 14F is made. (3) No gain or loss accrues to the company on that disposal. (4) But, on a subsequent disposal of the whole or part of the interest in UK land which is the subject of the disposal mentioned in subsection (1)(a), the whole or a corresponding part of the gain or loss which would have accrued to the company were it not for subsection (3)— (a) is deemed to accrue to the company (in addition to any gain or loss that actually accrues on that subsequent disposal), and (b) (if that would not otherwise be the case) is to be treated as an NRCGT gain chargeable to, or an NRCGT loss allowable for the purposes of, capital gains tax by virtue of section 14D accruing on a non-resident CGT disposal. (5) A company may make an election for subsections (3) and (4) not to apply in relation to the disposal mentioned in subsection (1)(a). (6) Such an election must be made within 2 years after the day on which the company ceases to be resident in the United Kingdom. (7) In this section, “interest in UK land” has the meaning given by paragraph 2 of Schedule B1.

30

Before section 189 (and the italic heading before it), insert—

(188A) (1) A “pooling election” is an election which— (a) specifies the date from which the election is to have effect (the “effective date” of the election), and (b) is made by all those members of a group (the “potential pooling group”) which are qualifying members. (2) For this purpose the “qualifying members” of a group are all the companies which are members of that group and meet the qualifying conditions on the effective date of the election. (3) The “qualifying conditions” are met by a company at any time when it— (a) is not resident in the United Kingdom, (b) is a closely-held company, (c) is not a company carrying on life assurance business (as defined in section 56 of the Finance Act 2012), (d) does not hold any chargeable residential assets, and (e) holds an asset the disposal of which would be a disposal of a UK residential property interest. (4) For the purposes of subsection (3), an asset is a “chargeable residential asset” at any time if a disposal of the asset at that time would be a non-resident CGT disposal but for section 14B(5) (gains forming part of chargeable profits for corporation tax purposes by virtue of section 10B etc). (5) The day on which a pooling election is made must not be later than the 30th day after the day specified as its effective date. (6) A pooling election is irrevocable. (7) In this section— - “closely-held company” is to be interpreted in accordance with Part 1 of Schedule C1; - “group” is to be interpreted in accordance with section 170. (188B) (1) The companies which make a pooling election form an NRCGT group. (2) An NRCGT group continues to exist as long as at least one member of the NRCGT group continues to be a member of the potential pooling group and to meet the conditions in paragraphs (a) to (d) of section 188A(3). (3) See also section 188F (companies becoming eligible to join NRCGT group) and section 188G (company ceasing to be a member of an NRCGT group). (188C) (1) This section applies where a company (“company A”) makes a non-resident CGT disposal to another company (“company B”) at a time when both companies are members of the same NRCGT group. (2) In subsections (3) to (5) “the asset” means the asset which is the subject of that disposal. (3) For the relevant purposes (see subsection (4))— (a) company A's acquisition of the asset is treated as company B's acquisition of the asset, (b) everything done by company A in relation to the asset in the period of company A's ownership of the asset is accordingly treated as done by company B, and (c) the disposal mentioned in subsection (1) is accordingly disregarded. (4) The “relevant purposes” means the purposes of— (a) the determination of whether or not an NRCGT gain or loss accrues on the disposal mentioned in subsection (1) or any subsequent disposal of the asset; (b) the determination of the amount of any such gain or loss; (c) the treatment for capital gains tax purposes of any such gain or loss. (5) Accordingly, references in subsection (3) to an acquisition made by, or anything else done by, company A include anything that company A is treated as having done as a result of the application of this section in relation to an earlier disposal of the asset. (6) Nothing in this section affects the treatment of the disposal in question for any other purposes (including the computation of any gains or losses, other than NRCGT gains or losses, that may accrue on the disposal). (188D) (1) The relevant body for a tax year (“year Y”) of an NRCGT group (see subsection (4)) is chargeable to capital gains tax in respect of chargeable NRCGT gains accruing to members of the group in the tax year on non-resident CGT disposals (and section 14D(1) does not apply to such gains). (2) Capital gains tax is charged on the total amount of chargeable NRCGT gains accruing in year Y to members of the NRCGT group, after deducting— (a) any allowable NRCGT losses accruing in year Y to any member of the NRCGT group, (b) so far as they have not been allowed as a deduction from chargeable gains accruing in any previous tax year, any allowable NRCGT losses which in any previous tax year (not earlier than the tax year 2015-16) accrued to any member of the NRCGT group, and (c) so far as they have not been allowed as a deduction from chargeable gains accruing in any previous tax year, any allowable losses (not falling within paragraph (b)) on disposals of UK residential property interests which in any previous tax year (not earlier than the tax year 1965-66) accrued to any company which is, at any time in year Y, a member of the NRCGT group. (3) The only deductions that can be made in calculating the total amount of chargeable NRCGT gains accruing as mentioned in subsection (2) are those permitted by this section. (4) The “relevant body” of an NRCGT group for a tax year is the body constituted by all the companies which are members of that NRCGT group at any time in that tax year. (5) This Act and the Management Act have effect with any modifications that may be necessary in relation to cases where the relevant body of an NRCGT group is chargeable to capital gains tax in accordance with this section. (188E) (1) Relief is not to be given under this Act more than once in respect of a group loss or any part of a group loss. (2) Relief is not to be given under this Act in respect of a group loss if, and so far as, relief has been or may be given in respect of it under the Tax Acts. (3) No relief is to be given otherwise than in accordance with this section for group losses. (4) In this section “group loss” means an NRCGT loss accruing to a member of an NRCGT group. (188F) (1) A company which is not a member of an NRCGT group and is eligible to become a member of that group may elect to do so. (2) A company is eligible to become a member of an NRCGT group at any time when it— (a) is a member of the potential pooling group, and (b) meets the qualifying conditions. But see subsections (3) and (4). (3) Subsection (4) applies if, throughout a period of 12 months, a company— (a) holds a UK residential asset, and (b) is eligible to become a member of an NRCGT group. (4) If the company has not elected to become a member of the NRCGT group by the end of that period of 12 months, the company is not eligible to become a member of the NRCGT group at any time after the end of that period of 12 months. (5) The effect of subsection (4) in relation to a company expires if at any time the company— (a) no longer holds the whole or part of any UK residential asset that was held by the company at any time in the 12 month period referred to in subsection (3), but (b) holds another UK residential asset. (6) For the purposes of this section a person holds a “UK residential asset” at any time when the person holds an interest in UK land the disposal of which would be a disposal of a UK residential property interest. (188G) (1) A company ceases to be a member of an NRCGT group if it ceases— (a) to be a member of the potential pooling group, or (b) to meet the any of the conditions in paragraphs (a) to (d) of section 188A(3). (2) Where a company ceases to be a member of an NRCGT group, the company is treated for the purposes of this Act and the Management Act as having— (a) disposed of the relevant assets immediately before the company ceased to be a member of the NRCGT group, and (b) immediately re-acquired them, at their market value at that time. (3) References in subsection (2) to a company ceasing to be a member of an NRCGT group do not apply to cases where a company ceases to be a member of the potential pooling group in consequence of another member of that group ceasing to exist. (4) Subsection (2) does not apply in a case where all the companies which are members of an NRCGT group cease to be members of that NRCGT group by reason only of an event which causes— (a) the principal company of the potential pooling group to cease to be a closely-held company, or (b) the head of a sub-group of which they are members, to cease to be a closely-held company or to become a member of another group (as defined in section 170). (5) Subsection (2) does not apply where a company which is a member of an NRCGT group ceases to be a member of the potential pooling group by reason only of the fact that the principal company of the potential pooling group becomes a member of another group (as defined in section 170). (6) In subsection (2) “the relevant assets” means any assets the company holds immediately before it ceases to be a member of the NRCGT group the disposal of which would be a disposal of a UK residential property interest (see Schedule B1). (7) For the purposes of this section— - “sub-group” means anything that would be a group (as defined in section 170) in the absence of subsections (4) and (6) of section 170; - the “head” of a sub-group is the company which is not a 75% subsidiary of any other member of the sub-group; - references to the “principal company” of the potential pooling group are to be interpreted in accordance with section 170. (188H) (1) Anything required or authorised to be done under this Act or the Management Act by or in relation to the relevant body of an NRCGT group is required or authorised to be done by or in relation to all the responsible members of that NRCGT group for that tax year. (2) The “responsible members” of an NRCGT group for a tax year are— (a) all the companies which are members of the NRCGT group at any time in that tax year, and (b) any companies which have subsequently become members of the NRCGT group. (3) This section is subject to section 188J (representative company). (188I) Where the responsible members of an NRCGT group are liable, in connection with their responsibility under section 188H to make a payment of tax or interest on unpaid tax, or pay any other amount, that liability is a joint and several liability of those responsible members. (188J) (1) Anything required or authorised to be done under this Act or the Management Act by or in relation to the relevant body of an NRCGT group may instead be done by or in relation to the company which is for the time being the representative company of the group. (2) This includes the making of the declaration required by section 9(2) or 12ZB(4)(b) of the Management Act (declaration that return is correct and complete). (3) The “representative company” means a member of the NRCGT group nominated by all the members of that group for the purposes of this section. (4) A nomination under subsection (3), or the revocation of such a nomination, has effect only after written notice of the nomination or revocation has been given to an officer of Revenue and Customs. (188K) (1) In sections 188A to 188J— (a) references to the “relevant body” of an NRCGT group are to be interpreted in accordance with section 188D(4); (b) references to an NRCGT gain or loss accruing to a member of an NRCGT group are to such a gain or loss accruing to a company at a time when the company is a member of the NRCGT group. (2) In sections 188A to 188J and this section— - “company” is to be interpreted in accordance with section 170(9); - “interest in UK land” has the same meaning as in Schedule B1; - “pooling election” has the meaning given by section 188A(1); - “potential pooling group”, in relation to an NRCGT group, is to be interpreted in accordance with section 188A(1)(b); - “qualifying conditions” has the meaning given by section 188A(3).

31

• (1) Section 260 (gifts on which inheritance tax is chargeable etc) is amended as follows.

• (2) In subsection (1), for “and 261” substitute “ , 261 and 261ZA ”.

• (3) After subsection (6) insert—

(6ZA) Subsections (6ZB) and (6ZC) apply in any case where— (a) the disposal is a non-resident CGT disposal, and (b) the transferee is resident in the United Kingdom. (6ZB) Subsections (3) and (4) have effect in relation to the disposal as if the reference to “chargeable gain” were a reference to “chargeable NRCGT gain”. (6ZC) Subsection (5) has effect in relation to the disposal as if the reference to “the excess referred to in paragraph (b) above” were a reference to “the chargeable NRCGT gain which, ignoring this section and section 17(1), would accrue to the transferor on the disposal”.

32

In section 261 (section 260 relief: gifts to non-residents), in subsection (1), for “Section 260(3)” substitute “ Subject to section 261ZA, section 260(3) ”.

33

After section 261 insert—

(261ZA) (1) This section applies where the disposal in relation to which a claim could be made under section 260 is a disposal of a UK residential property interest to a transferee who is not resident in the United Kingdom and, ignoring section 260— (a) a gain would accrue to the transferor on the disposal, and (b) on the assumption that the disposal is a non-resident CGT disposal (whether or not that is the case), that gain would be a chargeable NRCGT gain (see section 57B and Schedule 4ZZB). (2) Section 260(3) has effect in relation to the disposal as if it read— (3) Where this subsection applies in relation to a disposal, the amount of any chargeable gain which, apart from this section, would accrue to the transferor on the disposal, shall be reduced by an amount equal to the held-over gain on the disposal. (3) Where the disposal is a non-resident CGT disposal— (a) section 260(3), as modified by subsection (2) of this section, and section 260(4) have effect in relation to the disposal as if the references to “chargeable gain” were references to “chargeable NRCGT gain”, and (b) section 260(5) has effect in relation to the disposal as if the reference to “the excess referred to in paragraph (b) above” were a reference to “the chargeable NRCGT gain which, ignoring this section and section 17(1), would accrue to the transferor on the disposal”. (4) Where a claim for relief is made under section 260 in relation to the disposal mentioned in subsection (1), on a subsequent disposal by the transferee of the whole or part of the interest in UK land which is the subject of the disposal mentioned in subsection (1), the whole or a corresponding part of the held-over gain (see section 260(4))— (a) is deemed to accrue to the transferee (in addition to any gain or loss that actually accrues on that subsequent disposal), and (b) (if that would not otherwise be the case) is to be treated as a chargeable NRCGT gain accruing on a non-resident CGT disposal. (5) Where the subsequent disposal mentioned in subsection (4) is a disposal within section 260(2)(a), subsection (7) of that section has effect in relation to the disposal as if— (a) the reference to “the chargeable gain accruing to the transferee on the disposal of the asset” were a reference to the chargeable gain accruing on the disposal as computed apart from subsection (4), and (b) the reference in section 260(7)(b) to “the chargeable gain” were a reference to— (i) the chargeable gain (or, where the disposal is a non-resident CGT disposal, the chargeable NRCGT gain) accruing on the disposal, and (ii) the held-over gain deemed to accrue under subsection (4). (6) In this section, “interest in UK land” has the meaning given by paragraph 2 of Schedule B1.

34

In section 288 (interpretation), in subsection (1), at the appropriate places insert—

“disposal of a UK residential property interest” has the meaning given by Schedule B1;”

“non-resident CGT disposal” has the meaning given by section 14B;

“NRCGT gain” is to be interpreted in accordance with section 57B and Schedule 4ZZB;

“NRCGT group” is to be interpreted in accordance with section 188B (read with sections 188F and 188G);

“NRCGT loss” is to be interpreted in accordance with section 57B and Schedule 4ZZB;

“NRCGT return” has the meaning given by section 12ZB(2) of the Management Act;

.

35

• (1) Schedule 1 (application of exempt amount etc in cases involving settled property) is amended as follows.

• (2) In paragraph 1(1), for “(5C)” substitute “ (5D) ”.

• (3) In paragraph 2(1), for “(5C)” substitute “ (5D) ”.

36

After Schedule A1, insert—

SCHEDULE B1 (1) (1) For the purposes of this Act, the disposal by a person (“P”) of an interest in UK land (whether made before or after this Schedule comes into force) is a “disposal of a UK residential property interest” if the first or second condition is met. (2) The first condition is that— (a) the land has at any time in the relevant ownership period consisted of or included a dwelling, or (b) the interest in UK land subsists for the benefit of land that has at any time in the relevant ownership period consisted of or included a dwelling. (3) The second condition is that the interest in UK land subsists under a contract for an off-plan purchase. (4) In sub-paragraph (2) “relevant ownership period” means the period— (a) beginning with the day on which P acquired the interest in UK land or 6 April 2015 (whichever is later), and (b) ending with the day before the day on which the disposal occurs. (5) If the interest in UK land disposed of by P as mentioned in sub-paragraph (1) results from interests in UK land which P has acquired at different times (“the acquired interests”), P is regarded for the purposes of sub-paragraph (4)(a) as having acquired the interest when P first acquired any of the acquired interests. (6) In this paragraph— - “contract for an off-plan purchase” means a contract for the acquisition of land consisting of, or including, a building or part of a building that is to be constructed or adapted for use as a dwelling; - “dwelling” has the meaning given by paragraph 4. (7) Paragraphs 10 and 21 of Schedule 4ZZB contain further provision about interests under contracts for off-plan purchases. (2) (1) In this Schedule, “interest in UK land” means— (a) an estate, interest, right or power in or over land in the United Kingdom, or (b) the benefit of an obligation, restriction or condition affecting the value of any such estate, interest, right or power, other than an excluded interest. (2) The following are excluded interests— (a) any security interest; (b) a licence to use or occupy land; (c) in England and Wales or Northern Ireland— (i) a tenancy at will; (ii) a manor. (3) In sub-paragraph (2) “security interest” means an interest or right (other than a rentcharge) held for the purpose of securing the payment of money or the performance of any other obligation. (4) In relation to land in Scotland the reference in sub-paragraph (3) to a rentcharge is to be read as a reference to a feu duty or a payment mentioned in section 56(1) of the Abolition of Feudal Tenure etc (Scotland) Act 2000 (asp 5). (5) The Treasury may by regulations provide that any other description of interest or right in relation to land in the United Kingdom is an excluded interest. (6) Regulations under sub-paragraph (5) may make incidental, consequential, supplementary or transitional provision or savings. (3) (1) Sub-paragraph (2) applies where— (a) a person (“P”) grants at any time an option binding P to sell an interest in UK land, and (b) a disposal by P of that interest in UK land at that time would be a disposal of a UK residential property interest by virtue of paragraph 1. (2) The grant of the option is regarded for the purposes of this Schedule as the disposal of an interest in the land in question (if it would not be so regarded apart from this paragraph). (3) Nothing in this paragraph affects the operation of section 144 in relation to the grant of the option (or otherwise). (4) Subsection (6) of section 144 (interpretation of references to “sale” etc) applies for the purposes of this paragraph as it applies for the purposes of that section. (4) (1) For the purposes of this Schedule, a building counts as a dwelling at any time when— (a) it is used or suitable for use as a dwelling, or (b) it is in the process of being constructed or adapted for such use. (2) Land that at any time is, or is intended to be, occupied or enjoyed with a dwelling as a garden or grounds (including any building or structure on such land) is taken to be part of that dwelling at that time. (3) For the purposes of sub-paragraph (1) a building is not used (or suitable for use) as a dwelling if it is used as— (a) residential accommodation for school pupils; (b) residential accommodation for members of the armed forces; (c) a home or other institution providing residential accommodation for children; (d) a home or other institution providing residential accommodation with personal care for persons in need of personal care by reason of old age, disability, past or present dependence on alcohol or drugs or past or present mental disorder; (e) a hospital or hospice; (f) a prison or similar establishment; (g) a hotel or inn or similar establishment. (4) For the purposes of sub-paragraph (1) a building is not used (or suitable for use) as a dwelling if it is used, or suitable for use, as an institution (not falling within any of paragraphs (c) to (f) of sub-paragraph (3)) that is the sole or main residence of its residents. (5) For the purposes of sub-paragraph (1) a building is not used (or suitable for use) as a dwelling if it falls within— (a) paragraph 4 of Schedule 14 to the Housing Act 2004 (certain buildings occupied by students and managed or controlled by their educational establishment etc), (b) any corresponding provision having effect in Scotland, or (c) any corresponding provision having effect in Northern Ireland. (6) In sub-paragraph (5) “corresponding provision” means provision designated by regulations made by the Treasury as corresponding to the provision mentioned in sub-paragraph (5)(a). (7) If the accommodation provided by a building meets the conditions in sub-paragraph (8) in a tax year, the building is not to be regarded for the purposes of sub-paragraph (1) as used or suitable for use as a dwelling at any time in that tax year. (8) The conditions are that the accommodation— (a) includes at least 15 bedrooms, (b) is purpose-built for occupation by students, and (c) is occupied by students on at least 165 days in the tax year. In the expression “purpose-built” the reference to building includes conversion. (9) For the purposes of sub-paragraph (8), accommodation is occupied by students if it is occupied exclusively or mainly by persons who occupy it for the purpose of undertaking a course of education (otherwise than as school pupils). (10) A building which (for any reason) becomes temporarily unsuitable for use as a dwelling is treated for the purposes of sub-paragraph (1) as continuing to be suitable for use as a dwelling; but see also the special rules in— (a) paragraph 6 (damage to a dwelling), and (b) paragraph 8(7) (periods before or during certain works). (11) In this paragraph “building” includes a part of a building. (5) (1) The Treasury may by regulations amend paragraph 4 for the purpose of clarifying or changing the cases where a building is or is not to be regarded as being used as a dwelling (or suitable for use as a dwelling). (2) The provision that may be made under sub-paragraph (1) includes, in particular, provision omitting or adding cases where a building is or is not to be regarded as being used (or as suitable for use) as a dwelling. (3) Regulations under this paragraph may make incidental, consequential, supplementary or transitional provision or savings. (4) In this paragraph “building” includes a part of a building. (6) (1) Sub-paragraph (2) applies where a person disposes of an interest in UK land and a building that forms, or has formed, part of the land has at any time in the relevant ownership period been temporarily unsuitable for use as a dwelling. (2) Paragraph 4(10) (disregard of temporary unsuitability) does not apply in relation to the building's temporary unsuitability for use as a dwelling if— (a) the temporary unsuitability resulted from damage to the building, and (b) the first and second conditions are met. (3) The first condition is that the damage was— (a) accidental, or (b) otherwise caused by events beyond the control of the person disposing of the interest in UK land. (4) The second condition is that, as a result of the damage, the building was unsuitable for use as a dwelling for a period of at least 90 consecutive days. (5) Where the first and second conditions are met, work done in the 90-day period to restore the building to suitability for use as a dwelling does not count, for the purposes of paragraph 4(1), as construction or adaptation of the building for use as a dwelling. (6) The first condition is regarded as not being met if the damage occurred in the course of work that— (a) was being done for the purpose of altering the building, and (b) itself involved, or could be expected to involve, making the building unsuitable for use as a dwelling for 30 days or more. (7) The 90-day period mentioned in sub-paragraph (4) must end at or before the end of the relevant ownership period but may begin at any time (whether or not within the ownership period). (8) In this paragraph— (a) references to alteration include partial demolition; (b) “building” includes a part of a building; (c) “relevant ownership period” has the meaning given by paragraph 1(4). (7) A building is regarded as ceasing to exist from the time when it has either— (a) been demolished completely to ground level, or (b) been demolished to ground level except for a single facade (or, in the case of a building on a corner site, a double facade) the retention of which is a condition or requirement of planning permission or development consent. (8) (1) This paragraph applies where a person disposes of an interest in UK land, and a building which is (or was formerly) on the land and has at any time in the relevant ownership period been suitable for use as a dwelling— (a) has undergone complete or partial demolition or any other works during the relevant ownership period, and (b) as a result of the works, has, at or at any time before the completion of the disposal, either ceased to exist or become unsuitable for use as a dwelling. (2) If the conditions in sub-paragraph (4) are met at, or at any time before, the completion of the disposal, the building is taken to have been unsuitable for use as a dwelling throughout the part of the relevant ownership period when the works were in progress. (3) If the conditions in sub-paragraph (4) are met at, or at any time before, the completion of the disposal, the building is also taken to have been unsuitable for use as a dwelling throughout any period which— (a) ends immediately before the commencement of the works, and (b) is a period throughout which the building was, for reasons connected with the works, not used as a dwelling. (4) The conditions are that— (a) as a result of the works the building has (at any time before the completion of the disposal) either ceased to exist or become suitable for use otherwise than as a dwelling, (b) any planning permission or development consent required for the works, or for any change of use with which they are associated, has been granted, and (c) the works have been carried out in accordance with any such permission or consent. (5) If at the completion of the disposal the conditions in sub-paragraph (4) have not been met, the works are taken not to have affected the building's suitability for use as a dwelling (at any time before the disposal). (6) Sub-paragraph (2) does not apply in relation to any time when— (a) the building was undergoing any work, or put to a use, in relation to which planning permission or development consent was required but had not been granted, or (b) anything was being done in contravention of a condition or requirement attached to a planning permission or development consent relating to the building. (7) Where a building is treated under sub-paragraph (2) or (3) as unsuitable for use as a dwelling, the unsuitability is not regarded as temporary for the purposes of paragraph 4(10). (8) In this paragraph— - “building” includes a part of a building; - “relevant ownership period” has the meaning given by paragraph 1(4). (9) (1) The condition in paragraph 8(4)(b) is taken to have been met at the time of the completion of the disposal if the required planning permission or development consent is given subsequently. (2) For the purposes of paragraph 8(6)(a), the fact that planning permission or development consent had not been given at any time in relation to any work or use of a building is ignored if the required planning permission or development consent is given subsequently. (10) (1) For the purposes of this Schedule, the “completion” of the disposal of an interest in UK land is taken to occur— (a) at the time of the disposal, or (b) if the disposal is under a contract which is completed by a conveyance, at the time when the interest is conveyed. (2) In this Schedule— - “conveyance” includes any instrument (and “conveyed” is to be construed accordingly); - “development consent” means development consent under the Planning Act 2008; - “interest in UK land” has the meaning given by paragraph 2; - “land” includes a building; - “planning permission” has the meaning given by the relevant planning enactment. (3) In sub-paragraph (2) “the relevant planning enactment” means— (a) in relation to land in England and Wales, section 336(1) of the Town and Country Planning Act 1990; (b) in relation to land in Scotland, section 227(1) of the Town and Country Planning (Scotland) Act 1997; (c) in relation to land in Northern Ireland, Article 2(2) of the Planning (Northern Ireland) Order 1991 (S.I. 1991/1220 (N.I. 11)).

37

After Schedule B1 (as inserted by paragraph 36), insert—