Legalize / United Kingdom / Public General Act

Finance (No. 2) Act 2017

Type Public General Act

Publication 2017-11-16

Last updated 2025-03-20

State In force

Department Statute Law Database

Source legislation.gov.uk

articles Not indexed

Reform history JSON API

[^key-db4418b661cad84d43d5eea90ea7cc64]: Words in s. 53(6) substituted (28.4.2022) by The Criminal Justice Act 2003 (Commencement No. 33) and Sentencing Act 2020 (Commencement No. 2) Regulations 2022 (S.I. 2022/500), regs. 1(2), 5(1), Sch. Pt. 1

[^key-d73a1344ada3df0005a1938b1fb85482]: Words in s. 53(4)(a) substituted (7.2.2023 at 12.00 p.m.) by The Judicial Review and Courts Act 2022 (Magistrates’ Court Sentencing Powers) Regulations 2023 (S.I. 2023/149), regs. 1(2), 2(1), Sch. Pt. 1

[^key-3f602dec10bf47043edbf52e7038687f]: Words in s. 53(6) substituted (7.2.2023 at 12.00 p.m.) by The Judicial Review and Courts Act 2022 (Magistrates’ Court Sentencing Powers) Regulations 2023 (S.I. 2023/149), regs. 1(2), 2(1), Sch. Pt. 1

[^key-c8bc23b7e5217735891df90ca9be8219]: S. 7 omitted (for the tax year 2023-24 and subsequent tax years) by virtue of Finance (No. 2) Act 2023 (c. 30), s. 21(3)(4)

[^M_F_cbe29179-0396-4cfd-e4e6-4f169c491fac]: Words in Sch. 17 para. 2(1) inserted (10.12.2021 for specified purposes, 1.4.2022 in so far as not already in force and with effect in accordance with s. 85(1)(b) of the amending Act) by Finance Act 2021 (c. 26), s. 85(1)(a), Sch. 15 para. 7; S.I. 2021/1409, regs. 3, 4

[^key-b817488f0c54b07ec39de79a88e329c2]: Words in Sch. 18 para. 15(2)(b) inserted (6.4.2024 for specified purposes) by Finance Act 2021 (c. 26), s. 118(2), Sch. 27 para. 51; S.I. 2024/440, reg. 2

[^key-f8dbab476843108feb180a947e8a6ca4]: Sch. 2 para. 26 repealed (for the purposes of income tax in relation to the tax year 2025-26 and subsequent tax years) by Finance Act 2025 (c. 8), Sch. 5 paras. 4(e), 12(1) (with Sch. 5 paras. 15, 18(4), 19)

[^key-8cc430ee5634b5ce42ac3f69bf6e21a2]: Sch. 4 para. 155 repealed (for the purposes of corporation tax in relation to accounting periods beginning on or after 1.4.2025) by Finance Act 2025 (c. 8), Sch. 5 paras. 7(e), 12(2) (with Sch. 5 paras. 15, 18(4), 19)

[^key-083540073a5de1e29e91702f2f029534]: Words in Sch. 8 para. 41(4)(b) substituted (for the tax year 2025-26 and subsequent tax years) by Finance Act 2025 (c. 8), Sch. 11 para. 4(1)(2)

PART 3A — Duty to provide loan charge information to HMRC

“Loan charge information”

35A

(1) Paragraphs 35B and 35C apply if one of the following conditions is met.

(2) The first condition is that—

(a) a person (“P”) is treated as taking a relevant step within paragraph 1 immediately before the end of 5 April 2019, and

(b) Chapter 2 of Part 7A of ITEPA 2003 applies by reason of that relevant step.

(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4) The second condition is that—

(a) paragraph 24(1) applies by reference to a loan, or a quasi-loan, made by a person (“S”) to a relevant person (“R”),

(b) R makes an application under paragraph 24(1) for S to be treated as mentioned in paragraph 24(1) in relation to the relevant step concerned,

(d) that decision is not revoked before 6 April 2019,

(e) the first condition is not met, and

(f) A is living immediately before—

(i) the end of 30 September 2019, or

(ii) if earlier, the time given by sub-paragraphs (i) and (ii) of paragraph 24(1)(b).

(5) The third condition is that—

(a) neither the first nor the second condition is met, and

(b) if the date specified in paragraph 1(1)(c) and (2) were 16 March 2016 ...—

(i) a person (“T”) would be treated as taking a relevant step within paragraph 1 immediately before the end of 16 March 2016, and

(ii) Chapter 2 of Part 7A of ITEPA 2003 would apply by reason of that relevant step (using, for this purpose, the law that would be used to test whether that Chapter applies to a relevant step taken on 5 April 2019), and

(6) Paragraph 35C does not apply in a case where one of the first to third conditions is met if—

(a) a person agrees, with an officer of Revenue and Customs, terms for the discharge of liability for income tax,

(b) the terms cover all liability (if any) under Chapter 2 of Part 7A of ITEPA 2003 by reason of any loan-charge relevant step or result in there being no such liability, and

(7) In sub-paragraph (6)(b) “loan-charge relevant step” means (as the case may be)—

(a) the relevant step that P is treated as taking,

(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(c) any relevant step within paragraph 1 that S is, or has yet to be, treated as taking by reference to the loan or quasi-loan mentioned in sub-paragraph (4), or

(d) any relevant step within paragraph 1 that T is, or has yet to be, treated as taking by reference to the loan or quasi-loan by reference to which T would be treated as taking the relevant step mentioned in sub-paragraph (5)(b)(i).

35B

(1) In this paragraph “the appropriate third party” means P, ... S or T (as the case may be: see paragraph 35A).

(2) Sub-paragraph (3) applies if the appropriate third party receives a request from A or A’s personal representatives for information specified in the request that is reasonably required for the purpose of complying with paragraph 35C in the case concerned.

(3) The appropriate third party must provide A or A’s personal representatives—

(a) with such of the information as is available to the appropriate third party, and

(b) if any of the information is not available to the appropriate third party, with a statement confirming that so much of the information as is not provided is information that is not available to the appropriate third party.

(4) The information, and any such statement, must be provided promptly and, in any event, before the end of 30 days beginning with date of receipt of the request.

35C

(1) A, or A’s personal representatives, must provide the loan charge information (see paragraph 35D(1)) to the Commissioners for Her Majesty’s Revenue and Customs.

(2) The loan charge information must be provided—

(a) after 5 April 2019, and

(b) before 1 October 2020.

(3) The loan charge information must be provided in such form and manner as may be specified by, or on behalf of, the Commissioners for Her Majesty’s Revenue and Customs.

35D

(1) For the purposes of paragraphs 35C and 36, the “loan charge information” consists of—

(a) A’s name and, if A’s personal representatives are providing the information, their names,

(b) the address and telephone number, and e-mail address (if any), of each person providing the information,

(d) the unique taxpayer reference number (if any) allocated to A by HMRC,

(e) if the loan or quasi-loan that is or would be the subject of the relevant step mentioned in paragraph 35A(2)(a) or (4)(b) or (5)(b)(i)... is made to someone other than A, the name of the person to whom it is made,

(f) B’s name,

(g) the name of the relevant arrangement,

(h) the reference number (if any) allocated to the relevant arrangement by HMRC under section 311 of FA 2004 (disclosure of tax avoidance schemes: arrangements to be given reference number),

(i) any other reference number allocated by HMRC in connection with the relevant arrangement or the relevant step,

(j) if a person has agreed terms with an officer of Revenue and Customs for the partial discharge of the liability for income tax arising because of the application of Chapter 2 of Part 7A of ITEPA 2003 by reason of the relevant step that P... or S is treated as taking, the date of that agreement and the amount of the liability to which it relates,

(k) if a loan is or would be the subject of the relevant step mentioned in paragraph 35A(2)(a) or (4)(b) or (5)(b)(i)... the loan payment information (see sub-paragraph (2)), and

(l) if a quasi-loan is or would be the subject of the relevant step mentioned in paragraph 35A(2)(a) or (4)(b) or (5)(b)(i), the quasi-loan payment information (see sub-paragraph (3)).

(2) The “loan payment information”, in relation to a loan, consists of statements of the following—

(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(b) the initial principal amount of the loan,

(c) the amount that has become principal under the loan, otherwise than by capitalisation of interest, in each relevant tax year,

(d) the amount of principal under the loan repaid in each relevant tax year, ignoring any repayments not in money made on or after 17 March 2016,

(e) the details of any repayment that is to be disregarded under paragraph 4,

(f) the amount of principal under the loan that has been released or written off in each relevant tax year, and

(g) whether the liability for income tax arising because of the application of Chapter 2 of Part 7A of ITEPA 2003, or section 188 of that Act, by reason of the release or writing-off has been paid.

(3) The “quasi-loan payment information”, in relation to a quasi-loan, consists of statements of the following—

(a) the amount equal to the value of the acquired debt,

(b) the amount equal to the value of the additional debts acquired in each relevant tax year,

(c) the amount by which the initial debt amount has been reduced by way of repayment in each relevant tax year, ignoring any repayments not in money made on or after 17 March 2016,

(d) where the acquired debt or an additional debt is a right to a transfer of assets, and the assets have been transferred, the amount of the market value of the assets at the time of the transfer,

(e) the details of any repayment that is to be disregarded under paragraph 12,

(f) the amount by which the initial debt amount has been reduced by release or writing off in each relevant tax year, and

(g) whether the liability for income tax arising because of the application of Chapter 2 of Part 7A of ITEPA 2003, or section 188 of that Act, by reason of the release or writing-off has been paid.

(4) In this paragraph “relevant tax year” in relation to a loan, or a quasi-loan, means—

(a) the tax year in which the loan or quasi-loan was made, and

(b) each subsequent tax year.

(5) In sub-paragraph (3), “acquired debt”, “additional debt” and “initial debt amount” have the same meaning as in paragraph 11.

(6) In this paragraph and in paragraphs 35G to 35J, “HMRC” means Her Majesty’s Revenue and Customs.

35E

The Commissioners for Her Majesty’s Revenue and Customs may by regulations amend paragraph 35D so as to—

(a) add, remove or amend an entry in a list of information, and

(b) make incidental provision.

35F

(1) A person who fails to comply with paragraph 35C is liable to a penalty of £300.

(2) Sub-paragraph (3) applies if the failure continues after the date on which a penalty is imposed under sub-paragraph (1) in respect of the failure.

(3) The person is liable to a further penalty or penalties not exceeding £60 for each subsequent day, up to a maximum of 90 days, on which the failure continues.

35G

(1) This paragraph applies if—

(a) in complying with the duty under paragraph 35C, a person provides inaccurate information, and

(b) condition A, B or C is met.

(2) Condition A is that the inaccuracy is careless or deliberate.

(3) An inaccuracy is careless if it is due to a failure by the person to take reasonable care.

(4) Condition B is that the person knows of the inaccuracy at the time the information is provided but does not inform HMRC at that time.

(5) Condition C is that the person—

(a) discovers the inaccuracy some time later, and

(b) fails to take reasonable steps to inform HMRC.

(6) The person is liable to a penalty not exceeding £3000.

(7) Where the information contains more than one inaccuracy, a penalty is payable for each inaccuracy.

35H

(1) Liability to a penalty under paragraph 35F does not arise if the person satisfies HMRC or (on an appeal notified to the tribunal) the tribunal that there is a reasonable excuse for the failure.

(2) For the purposes of this paragraph—

(a) an insufficiency of funds is not a reasonable excuse unless attributable to events outside the person’s control,

(b) where the person relies on any other person to do anything, that is not a reasonable excuse unless the first person took reasonable care to avoid the failure, and

(c) where the person had a reasonable excuse for the failure but the excuse has ceased, the person is to be treated as having continued to have the excuse if the failure is remedied without unreasonable delay after the excuse ceased.

35I

(1) Where a person becomes liable for a penalty under paragraph 35F or 35G—

(a) HMRC may assess the penalty, and

(b) if they do so, they must notify the person.

(2) An assessment of a penalty under paragraph 35F must be made before 1 October 2021.

(3) An assessment of a penalty under paragraph 35G must be made before 1 October 2023.

Enforcement

35J

(1) A person may appeal against any of the following decisions of an officer of Revenue and Customs—

(a) a decision that a penalty is payable by that person under paragraph 35F or 35G, or

(b) a decision as to the amount of such a penalty.

(2) Notice of an appeal under this paragraph must be given—

(a) in writing,

(b) before the end of the period of 30 days beginning with the date on which the notification under paragraph 35I was issued, and

(3) Notice of an appeal under this paragraph must state the grounds of appeal.

(4) On an appeal under sub-paragraph (1)(a) that is notified to the tribunal, the tribunal may confirm or cancel the decision.

(5) On an appeal under sub-paragraph (1)(b) that is notified to the tribunal, the tribunal may—

(a) confirm the decision, or

(b) substitute for the decision another decision that the officer of Revenue and Customs had power to make.

35K

(1) A penalty under paragraph 35F or 35G must be paid—

(a) before the end of the period of 30 days beginning with the date on which the notification under paragraph 35I was issued, or

(b) if a notice of an appeal against the penalty is given, before the end of the period of 30 days beginning with the date on which the appeal is determined or withdrawn.

(2) A penalty under paragraph 35F or 35G may be enforced as if it were income tax charged in an assessment and due and payable.

36A

(1) Sub-paragraphs (2) to (8) apply if—

(a) a person (“P”) would, apart from this paragraph, be treated as taking a relevant step by paragraph 1 by reason of a loan made to a relevant person, and

(b) the loan gives rise to a charge to tax under section 455 of CTA 2010 by virtue of section 459 of that Act (loans treated as made to participators).

(2) In this paragraph “the key date” means the later of—

(a) 5 April 2019, and

(b) the day on which the tax referred to in sub-paragraph (1)(b) is due and payable (see section 455(3) of CTA 2010).

(3) Paragraph 1(2) has effect as if it treated P as taking the relevant step immediately before the end of the key date, but this is subject to sub-paragraphs (4) and (5).

(4) Paragraph 1(1) does not apply in the case of the loan if the payment condition is met.

(5) Paragraph 1(1) does not apply in the case of the loan if—

(a) the payment condition is not met,

(b) the charge to tax mentioned in sub-paragraph (1)(b) is reported, in a company tax return of B’s, as required under Schedule 18 to FA 1998 (company tax returns etc), and

(6) The payment condition is met if—

(a) the net section 455 charge is paid in full on or before the key date, or

(b) the net section 455 charge is nil.

(7) The “net section 455 charge” is the amount of the tax referred to sub-paragraph (1)(b) less the amount of section 458 relief from that tax.

(8) In sub-paragraph (7) “section 458 relief” means relief given under section 458 of CTA 2010—

(a) in respect of a repayment made, or a release or writing-off occurring, on or before the key date, and

(b) on a claim made on or before the key date.

Duty to provide loan charge information to HMRC

21

(1) Paragraph 22 applies if one of the following conditions is met.

(2) The first condition is that—

(a) a loan or quasi-loan in relation to which paragraph 1(2) applies is treated as a “relevant benefit” for the purposes of sections 23A to 23H of ITTOIA 2005, and

(b) section 23E of ITTOIA 2005 applies in relation to the relevant benefit (see section 23A of that Act).

(3) The second condition is that—

(a) an application is made under paragraph 20(1) by reference to a loan or quasi-loan in relation to which paragraph 1(2) applies,

(b) a favourable decision is made on the application before 6 April 2019, and

(4) Paragraph 22 does not apply in a case if—

(a) a person agrees, with an officer of Revenue and Customs, terms for the discharge of liability for income tax arising because of the application of section 23E of ITTOIA 2005,

(b) the terms cover all liability (if any) arising because of the application of that section by reference to a loan or quasi-loan in relation to which paragraph 1(2) applies, and

22

(1) T, or T’s personal representatives, must provide the loan charge information (see paragraph 23(1)) to the Commissioners for Her Majesty’s Revenue and Customs.

(2) The loan charge information must be provided—

(a) after 5 April 2019, and

(b) before 1 October 2020.

(3) The loan charge information must be provided in such form and manner as may be specified by, or on behalf of, the Commissioners for Her Majesty’s Revenue and Customs.

(4) In this paragraph and in paragraph 23, “T” is the person mentioned in section 23A(2) of ITTOIA 2005.

“Loan charge information”

23

(1) For the purposes of paragraph 22, the “loan charge information” consists of —

(a) T’s name and, if T’s personal representatives are providing the information, their names,

(b) the address and telephone number, and e-mail address (if any), of each person providing the information,

(d) the unique taxpayer reference number (if any) allocated to T by HMRC,

(e) the name of the arrangement mentioned in section 23A(3)(a) of ITTOIA 2005,

(f) the reference number (if any) allocated to the arrangement by HMRC under section 311 of FA 2004 (disclosure of tax avoidance schemes: arrangements to be given reference number),

(g) any other reference number allocated by HMRC in connection with the arrangement or with the loan or quasi-loan mentioned in paragraph 21(2) or (3),

(h) if the loan or quasi-loan mentioned in paragraph 21(2) or (3) is made to someone other than T, the name of the person to whom it is made,

(i) if a person has agreed terms with an officer of Revenue and Customs for the partial discharge of the liability for income tax arising because of the application of section 23E of ITTOIA 2005 in relation to the loan or quasi-loan mentioned in paragraph 21(2) or (3), the date of that agreement and the amount of the liability to which it relates,

(j) if the condition in paragraph 21(2) or (3) is met by reference to a loan, the loan payment information (see sub-paragraph (2)), and

(k) if the condition in paragraph 21(2) or (3) is met by reference to a quasi-loan, the quasi-loan payment information (see sub-paragraph (3)).

(2) The “loan payment information”, in relation to a loan, consists of statements of the following—

(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(b) the initial principal amount of the loan,

(c) the amount that has become principal under the loan, otherwise than by capitalisation of interest, in each relevant tax year,

(d) the amount of principal under the loan repaid in each relevant tax year, ignoring any repayments not in money made on or after 5 December 2016,

(e) the details of any repayment that is to be disregarded under paragraph 3(4),

(f) the amount of principal under the loan that has been released or written off in each relevant tax year,

(g) whether any liability for income tax arising because of the application of section 23E of ITTOIA 2005 by reason of the release or writing-off has been paid, and

(h) any amount released that has, in accordance with section 97 of ITTOIA 2005, been brought into account as a receipt in calculating the profits of the relevant trade.

(3) The “quasi-loan payment information”, in relation to a quasi-loan, consists of statements of the following—

(a) the amount equal to the value of the acquired debt,

(b) the amount equal to the value of the additional debts acquired in each relevant tax year,

(c) the amount by which the initial debt amount has been reduced by way of repayment in each relevant tax year, ignoring any repayments not in money made on or after 5 December 2016,

(d) where the acquired debt or an additional debt is a right to a transfer of assets, and the assets have been transferred, the amount of the market value of the assets at the time of the transfer,

(e) the details of any repayment that is to be disregarded under paragraph 9(5),

(f) the amount by which the initial debt amount has been reduced by release or writing off in each relevant tax year,

(g) whether any liability for income tax arising because of the application of section 23E of ITTOIA 2005 by reason of the release or writing-off has been paid, and

(h) any amount released that has, in accordance with section 97 of ITTOIA 2005, been brought into account as a receipt in calculating the profits of the relevant trade.

(4) In this paragraph “relevant tax year” in relation to a loan, or a quasi-loan, means—

(a) the tax year in which the loan or quasi-loan was made, and

(b) each subsequent tax year.

(5) In sub-paragraph (3), “acquired debt”, “additional debt” and “initial debt amount” have the same meaning as in paragraph 9.

(6) In this paragraph and in paragraphs 26 to 29, “HMRC” means Her Majesty’s Revenue and Customs.

24

The Commissioners for Her Majesty’s Revenue and Customs may by regulations amend paragraph 23 so as to—

(a) add, remove or amend an entry in a list of information, and

(b) make incidental provision.

Duty to provide loan charge information: penalties

25

(1) A person who fails to comply with paragraph 22 is liable to a penalty of £300.

(2) Sub-paragraph (3) applies if the failure continues after the date on which a penalty is imposed under sub-paragraph (1) in respect of the failure.

(3) The person is liable to a further penalty or penalties not exceeding £60 for each subsequent day, up to a maximum of 90 days, on which the failure continues.

26

(1) This paragraph applies if—

(a) in complying with the duty under paragraph 22, a person provides inaccurate information, and

(b) condition A, B or C is met.

(2) Condition A is that the inaccuracy is careless or deliberate.

(3) An inaccuracy is careless if it is due to a failure by the person to take reasonable care.

(4) Condition B is that the person knows of the inaccuracy at the time the information is provided but does not inform HMRC at that time.

(5) Condition C is that the person—

(a) discovers the inaccuracy some time later, and

(b) fails to take reasonable steps to inform HMRC.

(6) The person is liable to a penalty not exceeding £3000.

(7) Where the information contains more than one inaccuracy, a penalty is payable for each inaccuracy.

Penalties under paragraph 25: reasonable excuse

27

(1) Liability to a penalty under paragraph 25 does not arise if the person satisfies HMRC or (on an appeal notified to the tribunal) the tribunal that there is a reasonable excuse for the failure.

(2) For the purposes of this paragraph—

(a) an insufficiency of funds is not a reasonable excuse unless attributable to events outside the person’s control,

(b) where the person relies on any other person to do anything, that is not a reasonable excuse unless the first person took reasonable care to avoid the failure, and

(c) where the person had a reasonable excuse for the failure but the excuse has ceased, the person is to be treated as having continued to have the excuse if the failure is remedied without unreasonable delay after the excuse ceased.

Penalties under paragraphs 25 and 26: assessment, appeals and enforcement

28

(1) Where a person becomes liable for a penalty under paragraph 25 or 26—

(a) HMRC may assess the penalty, and

(b) if they do so, they must notify the person.

(2) An assessment of a penalty under paragraph 25 must be made before 1 October 2021.

(3) An assessment of a penalty under paragraph 26 must be made before 1 October 2023.

29

(1) A person may appeal against any of the following decisions of an officer of Revenue and Customs—

(a) a decision that a penalty is payable by that person under paragraph 25 or 26, or

(b) a decision as to the amount of such a penalty.

(2) Notice of an appeal under this paragraph must be given—

(a) in writing,

(b) before the end of the period of 30 days beginning with the date on which the notification under paragraph 28 was issued, and

(3) Notice of an appeal under this paragraph must state the grounds of appeal.

(4) On an appeal under sub-paragraph (1)(a) that is notified to the tribunal, the tribunal may confirm or cancel the decision.

(5) On an appeal under sub-paragraph (1)(b) that is notified to the tribunal, the tribunal may—

(a) confirm the decision, or

(b) substitute for the decision another decision that the officer of Revenue and Customs had power to make.

30

(1) A penalty under paragraph 25 or 26 must be paid—

(a) before the end of the period of 30 days beginning with the date on which the notification under paragraph 28 was issued, or

(b) if a notice of an appeal against the penalty is given, before the end of the period of 30 days beginning with the date on which the appeal is determined or withdrawn.

(2) A penalty under paragraph 25 or 26 may be enforced as if it were income tax charged in an assessment and due and payable.

“Loan charge information”

Enforcement

1A

(1) This paragraph applies where—

(a) a person (“P”) is treated as taking a relevant step within paragraph 1 (“the initial step”) by reason of making a loan or quasi-loan, and

(b) an election has been made by A for the purposes of this paragraph.

(2) P is treated as taking two further relevant steps for the purposes of Part 7A of ITEPA 2003.

(3) P is treated as taking one of the further steps on the first anniversary of the date on which P is treated as taking the initial step.

(4) P is treated as taking one of the further steps on the second anniversary of the date on which P is treated as taking the initial step.

(5) For the purposes of section 554Z3(1) of ITEPA 2003 (value of relevant step), the initial step and each of the further steps is to be treated as involving a sum of money equal to one third of the amount of the loan or quasi-loan that is outstanding at the time P is treated as taking the initial step.

(6) References in this Schedule and in Part 7A of ITEPA 2003 to a relevant step within paragraph 1A of this Schedule are to be read as references to a relevant step which a person is treated by this paragraph as taking.

(7) An election for the purposes of this paragraph—

(a) may be made at any time before 1 October 2020, and

(b) may be made at a later time if an officer of Revenue and Customs allows it.

(8) But a person who is under a duty imposed by paragraph 35C of this Schedule or paragraph 22 of Schedule 12 may not make an election for the purposes of this paragraph until that duty has been complied with.

(9) An election for the purposes of this paragraph may not be revoked.

(10) A person who has made an election for the purposes of paragraph 1(3A) of Schedule 12 is to be treated as having made an election for the purposes of this paragraph.

(11) The Commissioners for Her Majesty’s Revenue and Customs may by regulations provide that sub-paragraph (7)(a) applies to a specified class of persons as if the reference to 1 October 2020 were to such later date as is specified.

(12) In sub-paragraph (11) “specified” means specified in the regulations.

1B

(1) This paragraph applies where—

(a) a person is treated as taking a relevant step within paragraph 1 by reason of making a loan or quasi-loan,

(b) a reasonable case could have been made that for a qualifying tax year (“the relevant year”) A was chargeable to income tax on an amount that was referable to the loan or quasi-loan,

(c) at a time when an officer of Revenue and Customs had power to recover (from A or any other person) income tax for the relevant year in respect of that amount, a qualifying tax return or two or more qualifying tax returns of the same type taken together contained a reasonable disclosure of the loan or quasi-loan, and

(d) as at 6 April 2019 an officer of Revenue and Customs had not taken steps to recover (from A or any other person) income tax for the relevant year in respect of that amount.

(2) But this paragraph does not apply if—

(a) a reasonable case could have been made that for a tax year other than the relevant year (“the alternative year”) A was chargeable to income tax on an amount within sub-paragraph (3), and

(b) it is the case that—

(i) on or before 5 April 2019 an officer of Revenue and Customs took steps to recover (from A or any other person) income tax for the alternative year in respect of that amount, or

(ii) the alternative year is not a qualifying tax year.

(3) An amount is within this sub-paragraph if —

(a) it is the same amount as is mentioned in sub-paragraph (1),

(b) it is part of the amount mentioned in sub-paragraph (1), or

(4) Where this paragraph applies, then for the purposes of paragraphs 1(4) and 1A(5) the amount of the loan or quasi-loan that is outstanding is to be taken to be reduced (but not below nil) by the amount mentioned in sub-paragraph (1).

(5) For the purposes of sub-paragraph (1)(c) a qualifying tax return, or two or more qualifying tax returns taken together, contained a reasonable disclosure of the loan or quasi-loan if the return or returns taken together—

(a) identified the loan or quasi-loan,

(b) identified the person to whom the loan or quasi-loan was made in a case where the loan or quasi-loan was made to a person other than A,

(c) identified the relevant arrangements in pursuance of which or in connection with which the loan or quasi-loan was made, and

(d) provided such other information as was sufficient for it to be apparent that a reasonable case could be made that for the relevant year A was chargeable to income tax on an amount that was referable to the loan or quasi-loan.

(6) A reference in sub-paragraph (1)(b), (2) or (5)(d) to A being chargeable to income tax does not include A being chargeable to income tax by reason of section 175 of ITEPA 2003 (benefit of taxable cheap loan treated as earnings).

(7) In this paragraph—

“qualifying tax year” means the tax year 2015-16 and any earlier tax year, and

“qualifying tax return” means —a return made by A or B under section 8 of TMA 1970 for a qualifying tax year, and any accompanying accounts, statements or documents, ora return made by B under paragraph 3 of Schedule 18 to FA 1998 for an accounting period that commenced before 6 April 2016,and a qualifying tax return is of the same type as another if both fall within the same paragraph of this definition.

Exclusion for relevant step within paragraph 1A where initial step excluded

35ZA

Chapter 2 of Part 7A of ITEPA 2003 does not apply by reason of a relevant step within paragraph 1A if that Chapter does not apply by reason of the initial step (within the meaning given by sub-paragraph (1)(a) of paragraph 1A).

1A

(1) This paragraph applies where—

(a) a loan or quasi-loan is to be treated for the purposes of sections 23A to 23H of ITTOIA 2005 as a relevant benefit by reason of paragraph 1,

(b) a reasonable case could have been made that for a qualifying tax year (“the relevant year”) T was chargeable to income tax on an amount that was referable to the loan or quasi-loan,

(c) at a time when an officer of Revenue and Customs had power to recover (from T or any other person) income tax for the relevant year in respect of that amount, a qualifying tax return or two or more qualifying tax returns taken together contained a reasonable disclosure of the loan or quasi-loan, and

(d) as at 6 April 2019 an officer of Revenue and Customs had not taken steps to recover (from T or any other person) income tax for the relevant year in respect of that amount.

(2) But this paragraph does not apply if—

(a) a reasonable case could have been made that for a tax year other than the relevant year (“the alternative year”) T was chargeable to income tax on an amount within sub-paragraph (3), and

(b) it is the case that—

(i) on or before 5 April 2019 an officer of Revenue and Customs took steps to recover (from T or any other person) income tax for the alternative year in respect of that amount, or

(ii) the alternative year is not a qualifying tax year.

(3) An amount is within this sub-paragraph if—

(a) it is the same amount as is mentioned in sub-paragraph (1),

(b) it is part of the amount mentioned in sub-paragraph (1), or

(4) Where this paragraph applies, then for the purposes of paragraph 1(3)(a) and (3A)(a) the amount of the loan or quasi-loan that is outstanding is to be taken to be reduced (but not below nil) by the amount mentioned in sub-paragraph (1).

(5) For the purposes of sub-paragraph (1)(c) a qualifying tax return, or two or more qualifying tax returns taken together, contained a reasonable disclosure of the loan or quasi-loan if the return or returns taken together—

(a) identified the loan or quasi-loan,

(b) identified the person to whom the loan or quasi-loan was made in a case where the loan or quasi-loan was made to a person other than T,

(c) identified the relevant arrangements in pursuance of which or in connection with which the loan or quasi-loan was made, and

(d) provided such other information as was sufficient for it to be apparent that a reasonable case could be made that for the relevant year T was chargeable to income tax on an amount that was referable to the loan or quasi-loan.

(6) In this paragraph—

“qualifying tax year” means the tax year 2015-16 and any earlier tax year, and

“qualifying tax return” means a return made by T under section 8 of TMA 1970 for a qualifying tax year, and any accompanying accounts, statements or documents.

PART A1 — Introduction

A1

(1) This Schedule makes provision about the disclosure of information in relation to arrangements, or proposed arrangements, that enable, or might be expected to enable, a person to obtain a tax advantage in relation to VAT or another indirect tax.

(2) Among other things, this Schedule—

(a) imposes duties to provide information to HMRC (and others);

(b) allows HMRC to allocate reference numbers in relation to arrangements and proposed arrangements (in cases where the disclosure duties have been complied with and in other cases);

(c) makes provision about publication of information about arrangements and proposed arrangements, and persons involved in their supply;

(d) makes provision about penalties.

Notice of potential allocation of reference number: arrangements and proposals suspected of being notifiable

21A

(1) This paragraph applies where—

(a) HMRC have become aware that—

(i) a transaction forming part of arrangements has been entered into,

(ii) a firm approach has been made to a person in relation to a proposal for arrangements, with a view to making the proposal available for implementation, or

(iii) a proposal for arrangements is made available for implementation, and

(b) HMRC have reasonable grounds for suspecting that the arrangements are notifiable, or the proposal is notifiable.

(2) HMRC may issue a notice to a person explaining that, unless the person is able to satisfy HMRC, before the end of the notice period, that the arrangements are not notifiable or (as the case may be) the proposal is not notifiable, HMRC may allocate a reference number to the arrangements or (in the case of a proposal) the proposed arrangements.

(3) But HMRC may not issue a notice under this paragraph before the end of the period of 15 days beginning with the day on which they first become aware that the condition in paragraph (a)(i), (ii) or (iii) of sub-paragraph (1) is met.

(4) A notice under this paragraph must be issued to any person who, on the day the notice is issued, HMRC reasonably suspect to be a promoter in relation to the arrangements or proposal.

(5) A notice under this paragraph may be issued to any other person who HMRC reasonably suspect to be involved in the supply of the arrangements or proposed arrangements.

Duty of HMRC to notify persons of reference number

22A

(1) If a reference number is allocated in a case within paragraph 22(2), HMRC must notify the following of the number—

(a) the person who has complied, or purported to comply, with paragraph 11(1), 12(1), 17(2) or 18(2), and

(b) where the person has complied, or purported to comply, with paragraph 11(1) or 12(1), any other person—

(i) who is a promoter in relation to the proposal (or arrangements implementing it) or the arrangements (or a proposal implemented by them), and

(ii) whose identity and address have been notified to HMRC by the person who complied, or purported to comply, with paragraph 11(1) or 12(1).

(2) If a reference number is allocated in a case within paragraph 22(3), HMRC must notify the following of the number—

(a) any person who HMRC reasonably suspect to be, or to have been, a promoter in relation to the arrangements or the proposed arrangements, and

(b) any other person who HMRC reasonably suspect to be, or to have been, involved in the supply of the arrangements or the proposed arrangements.

(3) The duty in sub-paragraph (2) applies irrespective of whether the notice under paragraph 21A as a result of which the reference number was allocated has been issued to the person concerned.

Right of appeal: paragraph 22(3) case

22B

(1) This paragraph applies where HMRC have allocated a reference number to arrangements or proposed arrangements in a case within paragraph 22(3).

(2) A person who has been notified of the reference number may appeal to the tribunal against its allocation.

(3) An appeal under this paragraph may be brought only on the following grounds—

(a) that, in issuing the notice under paragraph 21A as a result of which the reference number was allocated, HMRC did not act in accordance with that paragraph;

(b) that, in allocating the reference number, HMRC did not act in accordance with paragraph 22;

(c) that the arrangements are not in fact notifiable arrangements or, in the case of proposed arrangements, that the proposal for the arrangements is not in fact a notifiable proposal.

(4) Notice of appeal under this paragraph must be given to the tribunal in writing before the end of the period of 30 days beginning with the day on which the person is notified of the number by HMRC.

(5) Notice may be given after that time if the tribunal give permission.

(6) The notice of appeal must specify the grounds of appeal.

(7) On an appeal under this paragraph, the tribunal may affirm or cancel HMRC's decision.

(8) If the tribunal cancel HMRC's decision, HMRC must withdraw the reference number.

(9) Bringing an appeal under this paragraph does not prevent—

(a) a power conferred by this Part of this Schedule from being exercised, or

(b) a duty imposed by this Part of this Schedule from continuing to apply.

Duty to provide further information requested by HMRC: paragraph 22(3) case

22C

(1) This paragraph applies where HMRC have allocated a reference number to arrangements or proposed arrangements in a case within paragraph 22(3).

(2) HMRC may require a relevant person to provide—

(a) specified information about the arrangements or proposed arrangements;

(b) documents relating to the arrangements or proposed arrangements.

(3) In sub-paragraph (2), “relevant person” means—

(a) any person who HMRC reasonably suspect to be, or to have been, a promoter in relation to the arrangements or the proposed arrangements;

(b) any other person who HMRC reasonably suspect to be, or to have been, involved in the supply of the arrangements or the proposed arrangements.

(4) HMRC may require information or documents only if they have reasonable grounds for suspecting that the information or documents will assist them in considering the arrangements or proposed arrangements.

(5) Where HMRC impose a requirement on a person under sub-paragraph (2), the person must comply with the requirement before the end of—

(a) the period of 10 working days beginning with the day on which HMRC imposed the requirement, or

(b) such longer period as HMRC may direct.

Duty to notify client of reference number: paragraph 22(3) case

23A

(1) This paragraph applies where a person is providing (or has provided) services to any person (“the client”) in connection with arrangements or proposed arrangements.

(2) The person must, before the end of the period of 30 days beginning with the relevant date, provide the client with prescribed information relating to any reference number allocated in a case within paragraph 22(3) (or, if more than one, any one such reference number) that has been notified to the person (whether by HMRC or any other person) in relation to—

(a) the arrangements or proposed arrangements, or

(b) any arrangements substantially the same as the arrangements or proposed arrangements (whether involving the same or different parties).

(3) “The relevant date” means the date on which the person has been notified of the reference number.

(4) HMRC may give notice that, in relation to arrangements or proposed arrangements specified in the notice, no person is under the duty under sub-paragraph (2) after the date specified in the notice.

Personal portfolio bonds

Business investment relief

Trading and property allowances

Hybrid and other mismatches

Elections in relation to assets appropriated to trading stock

Deemed domicile: inheritance tax

Exemption from attribution of carried interest gains

Employment income provided through third parties

Disposals concerned with land in United Kingdom

Co-ownership authorised contractual schemes: information requirements

Remote gaming duty: freeplay

Tobacco products manufacturing machinery: licensing scheme

Requirement for approval

Interpretation

Digital reporting and record-keeping for income tax etc

Digital reporting and record-keeping for VAT

Northern Ireland welfare payments: updating statutory reference

Short title

“Loan charge information”

Enforcement

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