Finance (No. 2) Act 2017

(357GC) (1) This section applies for the purposes of this Part. (2) A “cost-sharing arrangement” is an arrangement under which— (a) each of the parties to the arrangement is required to contribute to the cost of, or undertake activities for the purpose of, creating or developing an item or process, (b) each of those parties— (i) is entitled to a share of any income attributable to the item or process, or (ii) has one or more rights in respect of the item or process, and (c) the amount of any income received by each of those parties is proportionate to its participation in the arrangement as described in paragraph (a). (3) “Invention”, in relation to a cost-sharing arrangement, means the item or process that is the subject of the arrangement (or any item or process incorporated within it). (357GCZA) (1) This section applies if— (a) a company is a party to a cost-sharing arrangement, (b) another party to the arrangement (“P”) holds a qualifying IP right granted in respect of the invention, and (c) the company does not hold an exclusive licence in respect of the right. (2) But this section does not apply if the arrangement produces for the company a return within section 357BG(1)(c). (3) The company is to be treated for the purposes of this Part as if it held the right. (4) The right is to be treated for the purposes of this Part as a new qualifying IP right in relation to the company if— (a) the company or P (or both) became a party to the arrangement on or after 1 April 2017, or (b) the right is a new qualifying IP right in relation to P (or would be if P was a company). (5) Subsection (4) does not apply if— (a) the company held an exclusive licence in respect of the right immediately before it became a party to the arrangement, and (b) that licence was granted to the company before the relevant date. (6) The right is to be treated for the purposes of this Part as an old qualifying IP right in relation to the company if it is not to be treated as a new qualifying IP right by reason of subsection (4). (7) Subsections (7) and (8) of section 357BP (meaning of “relevant date”) apply for the purposes of subsection (5) of this section as they apply for the purposes of subsection (6) of that section. (357GCZB) (1) This section applies if— (a) a company is a party to a cost-sharing arrangement, (b) another party to the arrangement (“P”) holds an exclusive licence in respect of a qualifying IP right granted in respect of the invention, and (c) the company does not hold the right or another exclusive licence in respect of it. (2) But this section does not apply if the arrangement produces for the company a return within section 357BG(1)(c). (3) The company is to be treated for the purposes of this Part as if it held an exclusive licence in respect of the right. (4) The right is to be treated for the purposes of this Part as a new qualifying IP right in relation to the company if— (a) the company or P (or both) became a party to the arrangement on or after 1 April 2017, or (b) the right is a new qualifying IP right in relation to P (or would be if P was a company). (5) Subsection (4) does not apply if— (a) the company held the right immediately before it became a party to the arrangement, and (b) either— (i) the right had been granted or issued to the company in response to an application filed before 1 July 2016, or (ii) the right had been assigned to the company before the relevant date. (6) Subsection (4) also does not apply if— (a) the company held an exclusive licence in respect of the right immediately before it became a party to the arrangement, and (b) that licence was granted to the company before the relevant date. (7) The right is to be treated for the purposes of this Part as an old qualifying IP right in relation to the company if it is not to be treated as a new qualifying IP right by reason of subsection (4). (8) Subsections (7) and (8) of section 357BP (meaning of “relevant date”) apply for the purposes of subsections (5) and (6) of this section as they apply for the purposes of subsections (5) and (6) of that section. (357GCZC) (1) Subsection (2) applies if— (a) a company is a party to a cost-sharing arrangement, and (b) another party to the arrangement (“P”) undertakes research and development for the purpose of creating or developing the invention. (2) The research and development is to be treated for the purposes of sections 357BLC and 357BLD as having been contracted out by the company to P. (3) Subsection (4) applies if— (a) a company is a party to a cost-sharing arrangement, (b) another party to the arrangement (“P”) contracts out to another person (“A”) research and development for the purpose of creating or developing the invention, and (c) the company makes a payment under the arrangement in respect of that research and development (whether to P or to A). (4) For the purposes of sections 357BLC and 357BLD— (a) the company is to be treated as having contracted out to P research and development which is the same as that contracted out by P to A, and (b) the payment mentioned in subsection (3)(c) is to be treated as if it were a payment made to P in respect of the research and development the company is treated as having contracted out to P. (5) In this section “research and development” has the meaning given by section 1138. (357GCZD) (1) Subsection (2) applies if— (a) a company is a party to a cost-sharing arrangement, (b) a person (“A”) assigns to another party to the arrangement (“P”) a qualifying IP right, (c) the qualifying IP right is a right in respect of the invention, and (d) the company makes under the arrangement a payment in respect of the assignment (whether to A or to P). (2) The payment is to be treated for the purposes of section 357BLE as if it were a payment to A in respect of the assignment by A to the company of the right. (3) Subsection (4) applies if— (a) a company is a party to a cost-sharing arrangement, (b) a person (“A”) grants or transfers to another party to the arrangement (“P”) an exclusive licence in respect of qualifying IP right, (c) the qualifying IP right is a right granted in respect of the invention, and (d) the company makes a payment under the arrangement in respect of the grant or transfer (whether to A or to P). (4) The payment is to be treated for the purposes of section 357BLE as if it were a payment to A in respect of the grant or transfer by A to the company of the licence. (357GCZE) (1) Where— (a) a company makes a payment to a person (“P”) in consideration of that person entering into a cost-sharing arrangement with the company, and (b) P holds a qualifying IP right granted in respect of the invention or holds an exclusive licence in respect of such a right, a just and reasonable amount of the payment is to be treated for the purposes of section 357BLE as if it was an amount paid in respect of the assignment to the company of the right or (as the case may be) the transfer to the company of the licence. (2) Where— (a) a company makes a payment to a party to a cost-sharing arrangement (“P”) in consideration of P agreeing to the company becoming a party to the arrangement (whether in place of P or in addition to P), and (b) any party to the arrangement holds a qualifying IP right in respect of the invention or holds an exclusive licence in respect of such a right, a just and reasonable amount of the payment is to be treated for the purposes of section 357BLE as if it was an amount paid in respect of the assignment to the company of the right or (as the case may be) the transfer to the company of the licence. (3) Where— (a) a company that is a party to a cost-sharing arrangement makes a payment to another party to the arrangement in consideration of that party agreeing to the company becoming entitled to a greater share of the income attributable to the invention or acquiring additional rights in relation to the invention, and (b) any party to the arrangement holds a qualifying IP right in respect of the invention or holds an exclusive licence in respect of such a right, a just and reasonable amount of the payment is to be treated for the purposes of section 357BLE as if it was an amount paid in respect of the assignment to the company of the right or (as the case may be) the transfer to the company of the licence. (357GCZF) (1) Where— (a) a company receives a payment in consideration of its entering into a cost-sharing arrangement, and (b) the company holds a qualifying IP right granted in respect of the invention or holds an exclusive licence in respect of such a right, a just and reasonable amount of the payment is to be treated as relevant IP income of the company. (2) Where— (a) a company that is a party to a cost-sharing arrangement receives a payment from a person in consideration of its agreeing to that person becoming a party to the arrangement (whether in place of the company or in addition to it), and (b) any party to the arrangement holds a qualifying IP right in respect of the invention or holds an exclusive licence in respect of such a right, a just and reasonable amount of the payment is to be treated as relevant IP income of the company. (3) Where— (a) a company that is a party to a cost-sharing arrangement receives a payment from another party to the arrangement in consideration of its agreeing to that party becoming entitled to a greater share of the income attributable to the invention or acquiring additional rights in relation to the invention, and (b) any party to the arrangement holds a qualifying IP right in respect of the invention or holds an exclusive licence in respect of such a right, a just and reasonable amount of the payment is to be treated as relevant IP income of the company.

• (4) In section 357BP (meaning of “new qualifying IP right”) after subsection (12) insert—

(13) This section has effect subject to section 357GCZA (qualifying IP right held by another party to a cost-sharing arrangement) and section 357GCZB (exclusive licence held by another party to a cost-sharing arrangement).

• (5) The amendments made by this section have effect in relation to accounting periods beginning on or after 1 April 2017.

Hybrid and other mismatches

24

• (1) Part 6A of TIOPA 2010 (hybrid and other mismatches) is amended as follows.

• (2) In section 259B(3) (local taxes), for “is not outside the scope of subsection (2) by reason only that” substitute “ is outside the scope of subsection (2) if ”.

• (3) In section 259CC(2) (hybrid and other mismatches from financial instruments: meaning of “permitted” taxable period of a payee), for paragraph (b) substitute—

(b) the period begins at a later time and it is just and reasonable for the amount of ordinary income to arise for the period (rather than an earlier one).

• (4) In section 259DD(2) (hybrid transfer deduction/non-inclusion mismatches: meaning of “permitted” taxable period of a payee), for paragraph (b) substitute—

(b) the period begins at a later time and it is just and reasonable for the amount of ordinary income to arise for the period (rather than an earlier one).

• (5) In section 259EB (hybrid payer deduction/non-inclusion mismatches and their extent), after subsection (1) insert—

(1A) But there is no hybrid payer deduction/non-inclusion mismatch so far as the relevant deduction is— (a) a debit in respect of amortisation that is brought into account under section 729 or 731 of CTA 2009 (writing down the capitalised cost of an intangible fixed asset), or (b) an amount that is deductible in respect of amortisation under a provision of the law of a territory outside the United Kingdom that is equivalent to either of those sections.

• (6) In section 259FA (deduction/non-inclusion mismatches relating to transfers by permanent establishments), after subsection (4) insert—

(4A) For the purposes of this section “the PE deduction” does not include— (a) a debit in respect of amortisation that is brought into account under section 729 or 731 of CTA 2009 (writing down the capitalised cost of an intangible fixed asset), or (b) an amount that is deductible in respect of amortisation under a provision of the law of a territory outside the United Kingdom that is equivalent to either of those sections.

• (7) In section 259GB (hybrid payee deduction/non-inclusion mismatches and their extent), after subsection (1) insert—

(1A) But there is no hybrid payee deduction/non-inclusion mismatch so far as the relevant deduction is— (a) a debit in respect of amortisation that is brought into account under section 729 or 731 of CTA 2009 (writing down the capitalised cost of an intangible fixed asset), or (b) an amount that is deductible in respect of amortisation under a provision of the law of a territory outside the United Kingdom that is equivalent to either of those sections.

• (8) In section 259HB (multinational payee deduction/non-inclusion mismatches and their extent), after subsection (1) insert—

(1A) But there is no multinational payee deduction/non-inclusion mismatch so far as the relevant deduction is— (a) a debit in respect of amortisation that is brought into account under section 729 or 731 of CTA 2009 (writing down the capitalised cost of an intangible fixed asset), or (b) an amount that is deductible in respect of amortisation under a provision of the law of a territory outside the United Kingdom that is equivalent to either of those sections.

• (9) In section 259KB (imported mismatches: meaning of “excessive PE deduction” etc), after subsection (3) insert—

(3A) For the purposes of this section a “PE deduction” does not include— (a) a debit in respect of amortisation that is brought into account under section 729 or 731 of CTA 2009 (writing down the capitalised cost of an intangible fixed asset), or (b) an amount that is deductible in respect of amortisation under a provision of the law of a territory outside the United Kingdom that is equivalent to either of those sections.

• (10) The amendment made by subsection (2)—

• (a) has effect, in the case of its application to Chapter 6 of Part 6A of TIOPA 2010, in relation to excessive PE deductions in relation to which the relevant PE period begins on or after 13 July 2017,

• (b) has effect, in the case of its application to Chapter 9 or 10 of that Part, in relation to accounting periods beginning on or after that date, and

• (c) has effect, in the case of its application to any other Chapter of that Part, in relation to—

• (i) payments made on or after date, or

• (ii) quasi-payments in relation to which the payment period begins on or after that date.

• (11) For the purposes of subsection (10)(a), (b) and (c)(ii), where there is a straddling period—

• (a) so much of the straddling period as falls before 13 July 2017, and so much of it as falls on or after that date, are to be treated as separate accounting periods or separate taxable periods (as the case may be), and

• (b) if it is necessary to apportion an amount for the straddling period to the two separate periods, it is to be apportioned—

• (i) on a time basis according to the respective length of the separate periods, or

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

• (12) A “straddling period” means an accounting period or payment period (as the case may be) beginning before 13 July 2017 and ending on or after that date.

• (13) Part 6A of TIOPA 2010 has effect, and is to be deemed always to have had effect, with the amendments set out in subsections (3) to (9).

Trading profits taxable at the Northern Ireland rate

25

Schedule 7 contains—

• (a) amendments of Part 8B of CTA 2010 (trading profits taxable at the Northern Ireland rate), and

• (b) amendments consequential on or related to those amendments.

Chargeable gains

Elections in relation to assets appropriated to trading stock

26

• (1) Section 161 of TCGA 1992 (appropriations to and from trading stock) is amended as follows.

• (2) In subsection (3)—

• (a) for “a person's appropriation of an asset for the purposes of a trade” substitute “ a case where a chargeable gain would have accrued to a person on the appropriation of an asset for the purposes of a trade as mentioned in that subsection ”, and

• (b) for “the chargeable gain or increased by the amount of the allowable loss referred to in subsection (1), and where that subsection” substitute “ that chargeable gain, and where subsection (1) ”.

• (3) In subsection (3ZB)—

• (a) in paragraph (a)—

• (i) omit “or loss”, and

• (ii) omit “or an allowable loss”,

• (b) in paragraph (b)—

• (i) omit “, or increased by the amount of any loss,” and

• (ii) omit “or allowable loss”, and

• (c) in paragraph (c), at the end insert “ and a loss which accrues on that disposal which is not ATED-related is also unaffected by the election ”.

• (4) The amendments made by this section have effect in relation to appropriations of assets made on or after 8 March 2017.

Substantial shareholding exemption

27

• (1) Schedule 7AC to TCGA 1992 (exemptions for disposals by companies with substantial shareholding) is amended as follows.

• (2) Omit the following (which relate to requirements to be met by investing company)—

• (a) in paragraph 1(2), “the investing company and”;

• (b) in paragraph 3—

• (i) in sub-paragraph (2)(b), “(but see sub-paragraph (3) below)”;

• (ii) sub-paragraph (3);

• (iii) in sub-paragraph (4), “of paragraph 18(1)(b) and”;

• (c) in the heading to Part 3, “investing company and”;

• (d) paragraph 18 and the preceding italic heading;

• (e) in paragraph 23(3), “a member of a trading group or”.

• (3) In paragraph 7 (substantial shareholding requirement), for “two” substitute “ six ”.

• (4) In paragraph 10 (effect of earlier no-gain/no-loss transfer), in sub-paragraph (2)(b), after “but for” insert “ subsection (1A) or ”.

• (5) In paragraph 19 (requirements relating to company invested in)—

• (a) in sub-paragraph (1)(b), at the beginning insert “ in a case where sub-paragraph 1A) applies, ”;

• (b) after sub-paragraph (1) insert—

(1A) This sub-paragraph applies where— (a) the disposal is a disposal to a person connected with the investing company, or (b) the requirement in paragraph 7 is met by virtue of paragraph 15A.

;

• (c) at the end insert—

(4) Section 1122 of CTA 2010 (meaning of “connected” persons) applies for the purposes of sub-paragraph (1A)(a).

• (6) The amendments made by this section have effect in relation to disposals made on or after 1 April 2017.

Substantial shareholding exemption: institutional investors

28

• (1) Schedule 7AC to TCGA 1992 (exemptions for disposals by companies with substantial shareholding) is amended as follows.

• (2) After paragraph 3 insert—

(3A) (1) This paragraph applies in relation to a gain or loss accruing to a company (“the investing company”) on a disposal of shares or an interest in shares in another company (“the company invested in”). (2) This paragraph applies if— (a) the requirement in paragraph 7 is met (substantial shareholder requirement), (b) the requirement in paragraph 19 is not met (requirement relating to company invested in), and (c) the investing company is not a disqualified listed company. (3) If, immediately before the disposal, 80% or more of the ordinary share capital of the investing company is owned by qualifying institutional investors, no chargeable gain or loss accrues on the disposal. (4) If, immediately before the disposal, at least 25% but less than 80% of the ordinary share capital of the investing company is owned by qualifying institutional investors, the amount of the chargeable gain or loss accruing on the disposal is reduced by the percentage of the ordinary share capital of the investing company which is owned by the qualifying institutional investors. (5) A company is a “disqualified listed company” for the purposes of this Part of this Schedule if— (a) any of the shares forming part of the ordinary share capital of the company are listed on a recognised stock exchange, (b) the company is not a qualifying institutional investor, and (c) the company is not a qualifying UK REIT (6) In sub-paragraph (5)(c) “qualifying UK REIT” means a UK REIT within the meaning of Part 12 of CTA 2010 which— (a) meets the condition in section 528(4)(b) of that Act (company not a close company by virtue of having an institutional investor as a participant), or (b) by virtue of section 443 of that Act (companies controlled by or on behalf of Crown) is not treated as a close company. (3B) (1) This paragraph applies for the purposes of paragraph 3A. (2) A person “owns” ordinary share capital if the person owns it— (a) directly, (b) indirectly, or (c) partly directly and partly indirectly. (3) Sections 1155 to 1157 of CTA 2010 (meaning of “indirect ownership” and calculation of amounts owned indirectly) apply for the purposes of sub-paragraph (2). (4) For the purposes of sections 1155 to 1157 of CTA 2010 as applied by sub-paragraph (3)— (a) ordinary share capital may not be owned through a disqualified listed company; (b) treat references to a body corporate as including an exempt unauthorised unit trust (and references to ordinary share capital, in the case of such a trust, as references to units in the trust). (5) A person is also to be regarded as owning ordinary share capital in a company in circumstances where a person would, under paragraphs 12 and 13 of this Schedule, be regarded as holding shares in a company. (6) Where the assets of a partnership include ordinary share capital of a company, each partner is to be regarded as owning a proportion of that share capital equal to the partner's proportionate interest in that ordinary share capital. (7) In this Schedule “exempt unauthorised unit trust” has the same meaning as in the Unauthorised Unit Trusts (Tax) Regulations 2013 (SI 2013/2819).

• (3) After paragraph 8 insert—

(8A) (1) This paragraph applies in a case where at least 25% of the ordinary share capital of the investing company is owned by qualifying institutional investors. (2) The investing company also holds a “substantial shareholding” in the company invested in for the purposes of this Schedule if— (a) the investing company holds ordinary shares, or interests in ordinary shares, in the company invested in the cost of which on acquisition was at least £20,000,000, and (b) by virtue of those shares or interests or any other shares or interests in shares in the company invested in, the investing company— (i) is beneficially entitled to not less than a proportionate percentage of the profits available for distribution to equity holders of the company invested in, and (ii) would be beneficially entitled on a winding up to not less than a proportionate percentage of the assets of the company invested in available for distribution to equity holders. (3) In sub-paragraph (2)— - “cost” means the amount or value of the consideration, in money or money's worth, given by the investing company or on its behalf wholly and exclusively for the acquisition of the ordinary shares or interests in ordinary shares, together with the incidental costs to it of the acquisition; - “proportionate percentage” means a percentage equal to the percentage of the ordinary share capital held by the investing company by virtue of the ordinary shares and interests in ordinary shares referred to in sub-paragraph (2)(a). (4) For the purposes of sub-paragraph (2)(a) it does not matter whether there was a single acquisition or a series of acquisitions. (5) If— (a) the percentage (“the actual percentage”) of the profits or assets to which the investing company is, or would be, beneficially entitled as mentioned in sub-paragraph (2)(b)(i) or (ii) is less than the proportionate percentage, but (b) having regard to the proportion that the actual percentage bears to the proportionate percentage, the difference can reasonably be regarded as insignificant, the investing company is treated as meeting the condition in sub-paragraph (2)(b)(i) or (ii) (as the case may be). (6) Paragraph 3B (owning ordinary share capital) applies for the purposes of sub-paragraph (1). (7) Paragraph 8(2) applies for the purposes of sub-paragraph (2). (8) In this paragraph “ordinary shares” means shares in the ordinary share capital of the company invested in.

• (4) In paragraph 9 (aggregation), in sub-paragraph (1), for “paragraph 7” substitute “ paragraphs 7 and 8A(2) ”.

• (5) After paragraph 30 insert—

(30A) (1) In this Schedule “qualifying institutional investor” means a person falling within any of A to G below. (0) Pension schemes The trustee or manager of— (a) a registered pension scheme, other than an investment-regulated pension scheme, or (b) an overseas pension scheme, other than one which would be an investment-regulated pension scheme if it were a registered pension scheme. “Investment-regulated pension scheme” has the same meaning as in Part 1 of Schedule 29A to the Finance Act 2004. “Overseas pension scheme” has the same meaning as in Part 4 of that Act. (0) Life assurance businesses A company carrying on life assurance business, if immediately before the disposal its interest in the investing company is held as part of its long-term business fixed capital. “Life assurance business” has the meaning given in section 56 of the Finance Act 2012. Section 137 of that Act applies for the purposes of determining whether an interest forms part of the long-term business fixed capital of a company. (0) Sovereign wealth funds etc A person who cannot be liable for corporation tax or income tax (as relevant) on the ground of sovereign immunity. (0) Charities A charity. (0) Investment trusts An investment trust. (0) Authorised investment funds An authorised investment fund which meets the genuine diversity of ownership condition throughout the accounting period of the fund in which the disposal is made. “Authorised investment fund” has the same meaning as in the Authorised Investment Funds (Tax) Regulations 2006 (SI 2006/964). Regulation 9A of the Authorised Investment Funds (Tax) Regulations 2006 (genuine diversity of ownership) applies for this purpose. (0) Exempt unauthorised unit trusts The trustees of an exempt unauthorised unit trust, where the trust meets the genuine diversity of ownership condition throughout the accounting period of the trust in which the disposal is made. Regulation 9A of the Authorised Investment Funds (Tax) Regulations 2006 (genuine diversity of ownership) applies for this purpose (treating references to an authorised investment fund as including an exempt unauthorised unit trust). (2) The Treasury may by regulations amend this Schedule so as to add or remove a person as a “qualifying institutional investor” (and may in particular do so by changing the conditions subject to which a person is a qualifying institutional investor).

• (6) In paragraph 31 (index), at the appropriate places insert—

Exempt unauthorised unit trust	paragraph 3B(7)
Qualifying institutional investor	paragraph 30A
---	---

.

• (7) The amendments made by this section have effect in relation to disposals made on or after 1 April 2017.

Domicile, overseas property etc

Deemed domicile: income tax and capital gains tax

29

• (1) In Chapter 2A of Part 14 of ITA 2007 (income tax liability: domicile), after section 835B insert—

(835BA) (1) This section has effect for the purposes of the provisions of the Income Tax Acts or TCGA 1992 which apply this section. (2) An individual not domiciled in the United Kingdom at a time in a tax year (“the relevant tax year”) is to be regarded as domiciled in the United Kingdom at that time if— (a) condition A is met, or (b) condition B is met. (3) Condition A is that— (a) the individual was born in the United Kingdom, (b) the individual's domicile of origin was in the United Kingdom, and (c) the individual is UK resident for the relevant tax year. (4) Condition B is that the individual has been UK resident for at least 15 of the 20 tax years immediately preceding the relevant tax year. (5) But Condition B is not met if— (a) the individual is not UK resident for the relevant tax year, and (b) there is no tax year beginning after 5 April 2017 and preceding the relevant tax year in which the individual was UK resident.

• (2) Schedule 8 contains—

• (a) provision applying section 835BA of ITA 2007, and

• (b) further provision relating to this section.

Deemed domicile: inheritance tax

30

• (1) In section 267 of IHTA 1984 (persons treated as domiciled in the United Kingdom), in subsection (1)—

• (a) in paragraph (a), omit the final “or”;

• (b) after that paragraph insert—

(aa) he is a formerly domiciled resident for the tax year in which the relevant time falls (“the relevant tax year”), or

;

• (c) for paragraph (b) substitute—

(b) he was resident in the United Kingdom— (i) for at least fifteen of the twenty tax years immediately preceding the relevant tax year, and (ii) for at least one of the four tax years ending with the relevant tax year.

• (2) In that section, omit subsection (3).

• (3) In that section, in subsection (4), for “in any year of assessment” substitute “ for any tax year ”.

• (4) In section 48 of that Act (settlements: excluded property)—

• (a) in subsection (3)(b), for “and (3D)” substitute “ to (3E) ”;

• (b) in subsection (3A)(b), for “subsection (3B)” substitute “ subsections (3B) and (3E) ”;

• (c) after subsection (3D) insert—

(3E) In a case where the settlor of property comprised in a settlement is not domiciled in the United Kingdom at the time the settlement is made, the property is not excluded property by virtue of subsection (3) or (3A) above at any time in a tax year if the settlor was a formerly domiciled resident for that tax year.

• (5) In section 64 of that Act (charge at ten-year anniversary), in subsection (1B), after “was made” insert “ and is not a formerly domiciled resident for the tax year in which the ten-year anniversary falls ”.

• (6) In section 65 of that Act (charge at other times), after subsection (7A) insert—

(7B) Tax shall not be charged under this section by reason only that property comprised in a settlement becomes excluded property by virtue of section 48(3E) ceasing to apply in relation to it.

• (7) In section 82 of that Act (excluded property)—

• (a) for subsection (1) substitute—

(1) In a case where, apart from this section, property to which section 80 or 81 applies would be excluded property by virtue of section 48(3)(a) above, that property shall not be taken to be excluded property at any time (“the relevant time”) for the purposes of this Chapter (except sections 78 and 79) unless Conditions A and B are satisfied.

;

• (b) in subsection (2), for “the condition in subsection (3) below” substitute “ Condition A ”;

• (c) in subsection (3), for “The condition” substitute “ Condition A ”;

• (d) after subsection (3) insert—

(4) Condition B referred to in subsection (1) above is— (a) in the case of property to which section 80 above applies, that the person who is the settlor in relation to the settlement first mentioned in that section, and (b) in the case of property to which subsection (1) or (2) of section 81 above applies, that the person who is the settlor in relation to the first or second of the settlements mentioned in that subsection, was not a formerly domiciled resident for the tax year in which the relevant time falls.

• (8) In section 272 of that Act (interpretation)—

• (a) for the definition of “foreign-owned” substitute—

“foreign-owned”, in relation to property at any time, means property— (a) in the case of which the person beneficially entitled to it is at that time domiciled outside the United Kingdom, or (b) if the property is comprised in a settlement, in the case of which the settlor— (i) is not a formerly domiciled resident for the tax year in which that time falls, and (ii) was domiciled outside the United Kingdom when the property became comprised in the settlement;

;

• (b) at the appropriate place insert—

“formerly domiciled resident”, in relation to a tax year, means a person— (a) who was born in the United Kingdom, (b) whose domicile of origin was in the United Kingdom, (c) who was resident in the United Kingdom for that tax year, and (d) who was resident in the United Kingdom for at least one of the two tax years immediately preceding that tax year;

.

• (9) The amendments made by this section have effect in relation to times after 5 April 2017, subject to subsections (10) to (12).

• (10) The amendment to section 267(1) of IHTA 1984 made by subsection (1)(c) does not have effect in relation to a person if—

• (a) the person is not resident in the United Kingdom for the relevant tax year, and

• (b) there is no tax year beginning after 5 April 2017 and preceding the relevant tax year in which the person was resident in the United Kingdom.

In this subsection “relevant tax year” is to be construed in accordance with section 267(1) of IHTA 1984 as amended by subsection (1).

• (11) The amendment to section 267(1) of IHTA 1984 made by subsection (1)(c) also does not have effect in determining—

• (a) whether settled property which became comprised in the settlement on or before that date is excluded property for the purposes of IHTA 1984;

• (b) the settlor's domicile for the purposes of section 65(8) of that Act in relation to settled property which became comprised in the settlement on or before that date;

• (c) whether, for the purpose of section 65(8) of that Act, the condition in section 82(3) of that Act is satisfied in relation to such settled property.

• (12) Despite subsection (2), section 267(1) of IHTA 1984, as originally enacted, shall continue to be disregarded in determining—

• (a) whether settled property which became comprised in the settlement on or before 9 December 1974 is excluded property for the purposes of IHTA 1984;

• (b) the settlor's domicile for the purposes of section 65(8) of that Act in relation to settled property which became comprised in the settlement on or before that date;

• (c) whether, for the purpose of section 65(8) of that Act, the condition in section 82(3) of that Act is satisfied in relation to such settled property.

• (13) Subsections (14) and (15) apply if an amount of inheritance tax—

• (a) would not be charged but for the amendments made by this section, or

• (b) is, because of those amendments, greater than it would otherwise have been.

• (14) Section 233 of IHTA 1984 (interest on unpaid inheritance tax) applies in relation to the amount of inheritance tax as if the reference, in the closing words of subsection (1) of that section, to the end of the period mentioned in paragraph (a), (aa), (b) or (c) of that subsection were a reference to—

• (a) the end of that period, or

• (b) if later, the end of the month immediately following the month in which this Act is passed.

• (15) Subsection (1) of section 234 of IHTA 1984 (cases where inheritance tax payable by instalments carries interest only from instalment dates) applies in relation to the amount of inheritance tax as if the reference, in the closing words of that subsection, to the date at which an instalment is payable were a reference to—

• (a) the date at which the instalment is payable, or

• (b) if later, the end of the month immediately following the month in which this Act is passed.

• (16) Subsection (17) applies if—

• (a) a person is liable as mentioned in section 216(1)(c) of IHTA 1984 (trustee liable on 10-year anniversary, and other trust cases) for an amount of inheritance tax charged on an occasion, and

• (b) but for the amendments made by this section—

• (i) no inheritance tax would be charged on that occasion, or

• (ii) a lesser amount of inheritance tax would be charged on that occasion.

• (17) Section 216(6)(ad) of IHTA 1984 (delivery date for accounts required by section 216(1)(c)) applies in relation to the account to be delivered in connection with the occasion as if the reference to the expiration of the period of 6 months from the end of the month in which the occasion occurs were a reference to—

• (a) the expiration of that period, or

• (b) if later, the end of the month immediately following the month in which this Act is passed.

Settlements and transfer of assets abroad: value of benefits

31

Schedule 9 makes provision about the value of benefits received in relation to settlements and the transfer of assets abroad.

Exemption from attribution of carried interest gains

32

• (1) TCGA 1992 is amended as follows.

• (2) In section 13(1A) (attribution of gains to members of non-resident companies)—

• (a) omit the “or” at the end of paragraph (a), and

• (b) at the end of paragraph (b), insert

, or (c) a chargeable gain treated as accruing under section 103KA(2) or (3) (carried interest gains).

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

(4ZB) Where (apart from this subsection) the amount mentioned in subsection (1)(e) would include an amount of chargeable gains treated as accruing under section 103KA(2) or (3) (carried interest gains), the amount of the gains is to be disregarded for the purposes of subsection (1)(e).

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

(5B) Where (apart from this subsection) the amount mentioned in subsection (4)(a) would include an amount of chargeable gains treated as accruing under section 103KA(2) or (3) (carried interest gains), the amount of the gains is to be disregarded for the purposes of determining the section 2(2) amount.

• (5) The amendments made by this section have effect in relation to chargeable gains treated as accruing under section 103KA(2) or (3) of TCGA 1992 at any time before, as well as after, the passing of this Act.

Inheritance tax on overseas property representing UK residential property

33

Schedule 10 makes provision about the extent to which overseas property is excluded property for the purposes of inheritance tax, in cases where the value of the overseas property is attributable to residential property in the United Kingdom.

Disguised remuneration

Employment income provided through third parties

34

• (1) In section 554XA of ITEPA 2003 (employment income provided through third parties: exclusion for payments in respect of a tax liability), in subsection (2), omit paragraphs (a) and (b).

• (2) The amendment made by subsection (1) has effect in relation to relevant steps taken on or after 21 July 2017.

• (3) Schedule 11 makes provision about the application of Part 7A of ITEPA 2003 in relation to loans and quasi-loans that are outstanding on 5 April 2019.

Trading income provided through third parties

35

• (1) ITTOIA 2005 is amended as follows.

• (2) After section 23 insert—

(23A) (1) Section 23E (tax treatment of relevant benefits) applies if Conditions A to E are met. (2) Condition A is that a person (“T”) is or has been carrying on a trade (the “relevant trade”) alone or in partnership. (3) Condition B is that— (a) there is an arrangement (“the arrangement”) in connection with the relevant trade to which T is a party or which otherwise (wholly or partly) covers or relates to T, and (b) it is reasonable to suppose that, in essence— (i) the arrangement, or (ii) the arrangement so far as it covers or relates to T, is (wholly or partly) a means of providing, or is otherwise concerned with the provision of, relevant benefits. (4) Condition C is that— (a) a relevant benefit arises to T, or a person who is or has been connected with T, in pursuance of the arrangement, or (b) a relevant benefit arises to any other person in pursuance of the arrangement and any of the enjoyment conditions (see section 23F) is met in relation to the relevant benefit. (5) Condition D is that it is reasonable to suppose that the relevant benefit (directly or indirectly) represents, or has arisen or derives from, or is otherwise connected with, the whole or part of a qualifying third party payment. (6) Condition E is that it is reasonable to suppose that a tax advantage would be obtained by T, or a person who is or has been connected with T, as a result of the arrangement. (7) For the purposes of subsection (3) in particular, all relevant circumstances are to be taken into account in order to get to the essence of the matter. (8) In this section and sections 23B to 23H, “this group of sections” means this section and those sections. (9) The provisions of this group of sections apply to professions and vocations as they apply to trades. (10) See Schedule 12 to F(No.2)A 2017 for provision about the application of this group of sections in relation to loans and quasi-loans that are outstanding on 5 April 2019. (23B) (1) The following provisions apply for the purposes of this group of sections. (2) “Relevant benefit” means any payment (including a payment by way of a loan), a transfer of money's worth, or any other benefit. (3) The assumption of a liability of T by another person is to be treated as the provision of a relevant benefit to T. (4) The assumption, by a person other than T, of a liability of a person (“C”) who is or has been connected with T, is to be treated as the provision of a relevant benefit to C. (5) “Loan” includes— (a) any form of credit; (b) a payment that is purported to be made by way of a loan. (23C) (1) The following provisions apply for the purposes of this group of sections. (2) A payment is a “third party payment” if it is made (by T or another person) to— (a) T acting as trustee, or (b) any person other than T. (3) A third party payment is a “qualifying third party payment” if the deduction condition or the trade connection condition is met in relation to the payment. (4) The “deduction condition” is met in relation to a payment if— (a) a deduction for the payment is made in calculating the profits of the relevant trade, or (b) where the relevant trade is or has been carried on in partnership, a deduction for the payment is made in calculating the amount on which T is liable to income tax in respect of the profits of the trade. (5) The “trade connection condition” is met in relation to a payment if it is reasonable to suppose that in essence— (a) the payment is by way of consideration for goods or services provided in the course of the relevant trade, or (b) there is some other connection (direct or indirect) between the payment and the provision of goods or services in the course of the relevant trade. (6) For the purposes of subsection (5) in particular, all relevant circumstances are to be taken into account in order to get to the essence of the matter. (23D) (1) The following provisions apply for the purposes of this group of sections. (2) “Arrangement” includes any agreement, understanding, scheme, settlement, trust, transaction or series of transactions (whether or not legally enforceable). (3) A “tax advantage” includes— (a) relief or increased relief from tax, (b) repayment or increased repayment of tax, (c) avoidance or reduction of a charge to tax or an assessment to tax, (d) avoidance of a possible assessment to tax, (e) deferral of a payment of tax or advancement of a repayment of tax, and (f) avoidance of an obligation to deduct or account for tax. (4) Section 993 of ITA 2007 (meaning of “connected” persons) applies for the purposes of this group of sections as if subsection (4) of that section 993 were omitted. (23E) (1) Where this section applies (see section 23A), the relevant benefit amount is to be treated for income tax purposes as profits of the relevant trade for— (a) the tax year in which the relevant benefit arises, or (b) if T has ceased to carry on the relevant trade in a tax year (the “earlier tax year”) before the tax year referred to in paragraph (a), the earlier tax year. (2) For the purposes of this section, “the relevant benefit amount” means— (a) if the relevant benefit is a payment otherwise than by way of a loan, an amount equal to the amount of the payment, (b) if the relevant benefit is a payment by way of loan, an amount equal to the principal amount lent, or (c) in any other case, an amount equal to the value of the relevant benefit. (3) For the purposes of subsection (2)(c), the value of a relevant benefit is— (a) its market value at the time it arises, or (b) if higher, the cost of providing it. (4) In subsection (3) “market value” has the same meaning as it has for the purposes of TCGA 1992 by virtue of Part 8 of that Act. (23F) (1) For the purposes of section 23A(4), the enjoyment conditions are— (a) that the relevant benefit, or part of it, is in fact so dealt with by any person as to be calculated at some time to enure for the benefit of T; (b) that the arising of the relevant benefit operates to increase the value to T of any assets— (i) which T holds, or (ii) which are held for the benefit of T; (c) that T receives, or is entitled to receive, at any time any benefit provided or to be provided out of, or deriving or to be derived from, the relevant benefit (or part of it); (d) where the relevant benefit is the payment of a sum of money (including a payment by way of loan), that T may become entitled to the beneficial enjoyment of the sum or part of the sum if one or more powers are exercised or successively exercised (and for these purposes it does not matter who may exercise the powers or whether they are exercisable with or without the consent of another person); (e) where the relevant benefit is the payment of a sum of money (including a payment by way of loan), that T is able in any manner to control directly or indirectly the application of the sum or part of the sum. (2) Where an enjoyment condition is met in relation to part only of a relevant benefit, that part is to be treated as a separate benefit for the purposes of section 23A(4). (3) In subsection (1) references to T include references to a person who is or has been connected with T. (4) In determining whether any of the enjoyment conditions is met in relation to a relevant benefit, regard must be had to the substantial result and effect of all the relevant circumstances. (23G) (1) In determining whether section 23E applies in relation to a relevant benefit, no regard is to be had to any arrangements the main purpose, or one of the main purposes, of which is to secure that section 23E does not apply in relation to the whole, or any part, of— (a) the relevant benefit, or (b) the relevant benefit and one or more other relevant benefits (whether or not all arising to the same person). (2) Where arrangements are disregarded under subsection (1), and a relevant benefit (or part of it)— (a) would, if the arrangements were not disregarded, arise before 6 April 2017, but (b) would, when the arrangements are disregarded, arise on or after that date, the relevant benefit (or part) is to be regarded for the purposes of this group of sections as arising on the date on which it would arise apart from the arrangements. (23H) (1) This section applies where— (a) income tax is charged on an individual by virtue of the application of section 23E in relation to a relevant benefit amount, and (b) at any time, a tax (whether income tax or another tax) is charged on the individual or another person otherwise than by virtue of the application of section 23E in relation to the relevant benefit concerned. (2) In order to avoid a double charge to tax, the individual may make a claim for one or more consequential adjustments to be made in respect of the tax charged as mentioned in subsection (1)(b). (3) On a claim under this section an officer of Revenue and Customs must make such of the consequential adjustments claimed (if any) as are just and reasonable. (4) The value of any consequential adjustments must not exceed the lesser of— (a) the income tax charged on the individual as mentioned in subsection (1)(a), and (b) the tax charged as mentioned in subsection (1)(b). (5) Consequential adjustments may be made— (a) in respect of any period, (b) by way of an assessment, the modification of an assessment, the amendment of a claim, or otherwise, and (c) despite any time limit imposed by or under any enactment.

• (3) In section 7(2) (income charged: profits of a tax year) at the end insert “(including amounts treated as profits of the tax year under section 23E(1)).

• (4) The amendments made by this section have effect in relation to relevant benefits arising on or after 6 April 2017.

• (5) Schedule 12 contains provision about the application of new sections 23A to 23H of ITTOIA 2005 in relation to loans and quasi-loans that are outstanding on 5 April 2019.

Disguised remuneration schemes: restriction of income tax relief

36

• (1) Section 38 of ITTOIA 2005 (restriction of deductions: employee benefit contributions) is amended in accordance with subsections (2) to (5).

• (2) After subsection (1) insert—

(1A) No deduction is allowed under this section in respect of employee benefit contributions for a period of account which starts more than 5 years after the end of the period of account in which the contributions are made.

• (3) After subsection (2) insert—

(2AA) Subsection (2) is subject to subsections (1A) and (2AB). (2AB) Where subsection (3C) applies, no deduction is allowed for an amount in respect of the contributions for the period except so far as the amount is a qualifying amount (see subsection (3D)).

• (4) After subsection (3) insert—

(3A) Subsection (3) is subject to subsections (1A) and (3B). (3B) Where subsection (3C) applies, an amount disallowed under subsection (2) is allowed as a deduction for a subsequent period only so far as it is a qualifying amount. (3C) This subsection applies where the provision of qualifying benefits out of, or by way of, the contributions gives rise both to an employment income tax charge and to an NIC charge. (3D) An amount in respect of employee benefit contributions is a “qualifying amount” if the relevant tax charges are paid before the end of the relevant period (and are not repaid). (3E) For the purposes of subsection (3D)— (a) the “relevant tax charges”, in relation to an amount, are the employment income tax charge and the NIC charge arising in respect of benefits which are provided out of, or by way of, that amount, and (b) the “relevant period” is the period of 12 months immediately following the end of the period of account for which the deduction for the employee benefit contributions would (apart from this section) be allowable. (3F) For the purposes of subsections (3C) and (3E), “employment income tax charge” and “NIC charge” have the meaning given by section 40(7).

• (5) After subsection (3F) (inserted by subsection (4)) insert—

(3G) Subsection (3H) applies where— (a) a deduction would, apart from this section, be allowable for an amount (the “remuneration amount”) in respect of employees' remuneration, and (b) in consequence of the payment of the employees' remuneration, employee benefit contributions are made, or are to be made, in respect of the remuneration amount. (3H) In calculating for income tax purposes the profits of a trade, the deduction referred to in subsection (3G)(a) is to be treated as a deduction in respect of employee benefit contributions made or to be made (and is to be treated as not being a deduction in respect of employees' remuneration).

• (6) Section 866 of ITTOIA 2005 (employee benefit contributions: non-trades and non-property businesses) is amended in accordance with subsections (7) to (10).

• (7) After subsection (2) insert—

(2A) No deduction is allowed under this section in respect of employee benefit contributions for a period of account which starts more than 5 years after the end of the period of account in which the contributions are made.

• (8) After subsection (3) insert—

(3A) Subsection (3) is subject to subsections (2A) and (3B). (3B) Where subsection (4C) applies, no deduction is allowed for an amount in respect of the contributions for the period except so far as the amount is a qualifying amount (see subsection (4D)).

• (9) After subsection (4) insert—

(4A) Subsection (4) is subject to subsections (2A) and (4B). (4B) Where subsection (4C) applies, an amount disallowed under subsection (3) is allowed as a deduction for a subsequent period only so far as it is a qualifying amount. (4C) This subsection applies where the provision of qualifying benefits out of, or by way of, the contributions gives rise both to an employment income tax charge and to an NIC charge. (4D) An amount in respect of employee benefit contributions is a “qualifying amount” if the relevant tax charges are paid before the end of the relevant period (and are not repaid). (4E) For the purposes of subsection (4D)— (a) the “relevant tax charges”, in relation to an amount, are the employment income tax charge and the NIC charge arising in respect of benefits which are provided out of, or by way of, that amount, and (b) the “relevant period” is the period of 12 months immediately following the end of the period of account for which the deduction for the employee benefit contributions would (apart from this section) be allowable. (4F) For the purposes of subsections (4C) and (4E), “employment income tax charge” and “NIC charge” have the meaning given by section 40(7).

• (10) After subsection (4F) (inserted by subsection (9)) insert—

(4G) Subsection (4H) applies where— (a) a deduction would, apart from this section, be allowable for an amount (the “remuneration amount”) in respect of employees' remuneration, and (b) in consequence of the payment of the employees' remuneration, employee benefit contributions are made, or are to be made, in respect of the remuneration amount. (4H) In calculating for income tax purposes a person's profits or other income, the deduction referred to in subsection (4G)(a) is to be treated as a deduction in respect of employee benefit contributions made or to be made (and is to be treated as not being a deduction in respect of employees' remuneration).

• (11) The amendments made by subsections (2) to (4) and (7) to (9) have effect in relation to employee benefit contributions made, or to be made, on or after 6 April 2017.

• (12) The amendments made by subsections (5) and (10) have effect in relation to remuneration paid on or after 6 April 2017.

Disguised remuneration schemes: restriction of corporation tax relief

37

• (1) Section 1290 of CTA 2009 (restriction of deductions: employee benefit contributions) is amended in accordance with subsections (2) to (5).

• (2) After subsection (1) insert—

(1A) No deduction is allowed under this section in respect of employee benefit contributions for a period of account which starts more than 5 years after the end of the period of account in which the contributions are made.

• (3) After subsection (2) insert—

(2A) Subsection (2) is subject to subsections (1A) and (2B). (2B) Where subsection (3C) applies, no deduction is allowed for an amount in respect of the contributions for the period except so far as the amount is a qualifying amount (see subsection (3D)).

• (4) After subsection (3) insert—

(3A) Subsection (3) is subject to subsections (1A) and (3B). (3B) Where subsection (3C) applies, an amount disallowed under subsection (2) is allowed as a deduction for a subsequent period only so far as it is a qualifying amount. (3C) This subsection applies where the provision of qualifying benefits out of, or by way of, the contributions gives rise both to an employment income tax charge and to an NIC charge. (3D) An amount in respect of employee benefit contributions is a “qualifying amount” if the relevant tax charges are paid before the end of the relevant period (and are not repaid). (3E) For the purposes of subsection (3D)— (a) the “relevant tax charges”, in relation to an amount, are the employment income tax charge and the NIC charge arising in respect of benefits which are provided out of, or by way of, that amount, and (b) the “relevant period” is the period of 12 months immediately following the end of the period of account for which the deduction for the employee benefit contributions would (apart from this section) be allowable. (3F) For the purposes of subsections (3C) and (3E), “employment income tax charge” and “NIC charge” have the meaning given by section 1292(7).

• (5) After subsection (3F) (inserted by subsection (4)) insert—

(3G) Subsection (3H) applies where— (a) a deduction would, apart from this section, be allowable for an amount (the “remuneration amount”) in respect of employees' remuneration, and (b) in consequence of the payment of the employees' remuneration, employee benefit contributions are made, or are to be made, in respect of the remuneration amount. (3H) In calculating for corporation tax purposes the profits of a company, the deduction referred to in subsection (3G)(a) is to be treated as a deduction in respect of employee benefit contributions made or to be made (and is to be treated as not being a deduction in respect of employees' remuneration).

• (6) The amendments made by subsections (2) to (4) have effect in relation to employee benefit contributions made, or to be made, on or after 1 April 2017.

• (7) The amendment made by subsection (5) has effect in relation to remuneration paid on or after 1 April 2017.

Capital allowances

First-year allowance for expenditure on electric vehicle charging points

38

• (1) CAA 2001 is amended as follows.

• (2) In section 39 (first-year qualifying expenditure) after the entry for section 45E insert—

section 45EA	expenditure on plant or machinery for electric vehicle charging point

.

• (3) After section 45E insert—

(45EA) (1) Expenditure is first-year qualifying expenditure if— (a) it is incurred in the relevant period, (b) it is expenditure on plant or machinery for an electric vehicle charging point where the plant or machinery is unused and not second-hand, and (c) it is not excluded by section 46 (general exclusions). (2) For the purposes of this section expenditure on plant or machinery for an electric vehicle charging point is expenditure on plant or machinery installed solely for the purpose of charging electric vehicles. (3) The “relevant period” is the period beginning with 23 November 2016 and ending with— (a) in the case of expenditure incurred by a person within the charge to corporation tax, 31 March 2019, and (b) in the case of expenditure incurred by a person within the charge to income tax, 5 April 2019. (4) The Treasury may by regulations amend subsection (3) so as to extend the relevant period. (5) In this section— - “electric vehicle” means a road vehicle that can be propelled by electrical power (whether or not it can also be propelled by another kind of power); - “electric vehicle charging point” means a facility for charging an electric vehicle.

• (4) In section 46 (general exclusions), in subsection (1) after the entry for section 45E insert— “ section 45EA (expenditure on plant or machinery for electric vehicle charging point) ”.

• (5) In section 52 (amount of first-year allowances)—

• (a) in the table in subsection (3), after the entry for expenditure qualifying under section 45E insert—

Expenditure qualifying under section 45EA (expenditure on plant or machinery for electric vehicle charging point)	100%

• (b) after subsection (3) insert—

(3A) Subsection (3B) applies where the Treasury make regulations under section 45EA(4) (power to extend relevant period). (3B) The regulations may amend the amount specified in column 2 of the Table in subsection (3) for expenditure qualifying under section 45EA, but only in relation to expenditure incurred after the date on which the relevant period would have ended but for the regulations.

Transactions in UK land

Disposals concerned with land in United Kingdom

39

• (1) The FA 2016 amendments have effect (so far as they would not otherwise have effect) in relation to—

• (a) amounts that are recognised in GAAP accounts drawn up for any period of account beginning on or after 8 March 2017, or

• (b) in the case of a straddling period, amounts that would be recognised in GAAP accounts drawn up for a period of account beginning on 8 March 2017 and ending when the straddling period ends.

• (2) In subsection (1)—

• “the FA 2016 amendments” means—the amendments made by sections 76, 77 and 80 of FA 2016 (corporation tax treatment of certain profits and gains realised from disposals concerned with land in the United Kingdom), orthe amendments made by sections 78 and 79 of that Act (corresponding rules for income tax purposes),

• “GAAP accounts” means accounts drawn up in accordance with generally accepted accounting practice,

• “recognised” means recognised as an item of profit or loss, and

• “straddling period” means a period of account beginning before 8 March 2017 and ending on or after that date.

• (3) In section 161 of TCGA 1992 (appropriations to and from stock), in subsection (5)(a), for “CTA 2010” substitute “ ITA 2007 ”.

• (4) Section 79(10) of FA 2016 (which substitutes paragraph (a) of section 161(5) of TCGA 1992) is to be regarded as always having had effect with the amendment made by subsection (3).

Co-ownership authorised contractual schemes

Co-ownership authorised contractual schemes: capital allowances

40

In Part 2 of CAA 2001 (plant and machinery), in Chapter 20 (supplementary provisions), after the Chapter heading insert—