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Finance Act 2019

Type Public General Act

Publication 2019-02-12

Last updated 2026-04-20

State In force

Department Statute Law Database

Source legislation.gov.uk

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(a) in the opening words, for “section 2(2)(b)” substitute “ section 1(3)(b) ”, and

(b) in paragraph (c), for “section 10A” substitute “ section 1M ”.

85

(1) Section 279D (elections under section 279A) is amended as follows.

(2) In subsection (6)(c), for “section 2(2)(a)” substitute “ section 1(3)(a) ”.

(3) In subsection (7), for “section 2(2)(b)” (in both places) substitute “ section 1(3)(b) ”.

86

In section 287 (orders and regulations etc), in subsection (4), for “3(4)” substitute “ 1L(2) ”.

87

(1) Section 288 (interpretation) is amended as follows.

(2) In subsection (1) omit—

(a) the definition of “ATED-related”,

(b) the definition of “non-resident CGT disposal”,

(d) the definition of “NRCGT group”,

(e) the definition of “NRCGT loss”, and

(f) the definition of “relevant high value disposal”.

(3) In subsection (8), in the Table, in the entry relating to “branch or agency”, for “s 10(6)” substitute “ s 1B(5) ”.

88

In Schedule 4A (disposal of interest in settled property etc), in paragraph 6(1), for “met the residence condition set out in section 2(1A)” substitute “ was UK resident for the tax year (as determined in accordance with Chapter 1 of Part 1 of this Act) ”.

89

(1) Schedule 4C (transfers of value: attribution of gains to beneficiaries) is amended as follows.

(2) For “the section 2(2) amount” or “the section 2(2) amounts”, in each place, substitute “ the section 1(3) amount ” or “the section 1(3) amounts” respectively.

(3) In paragraph 1A(3), for “meets the residence condition set out in section 2(1A)” substitute “ is UK resident for the tax year (as determined in accordance with Chapter 1 of Part 1 of this Act) ”.

(4) In paragraph 4—

(a) in sub-paragraph (2), for “section 2(2)” substitute “ section 1(3) ”, and

(b) for sub-paragraph (3) substitute—

(3) Where (apart from this sub-paragraph) the chargeable amount mentioned in sub-paragraph (2) would include a chargeable gain or allowable loss to which section 1A(3)(b) or (c) applies (disposals by non-UK residents within the charge to capital gains tax), so much of the gain or loss as would be so included is to be disregarded for the purposes of determining the chargeable amount.

(5) In paragraph 6(1)(b), for “section 10A” substitute “ section 1M ”.

(6) In paragraph 12(1)(a) and (5), and in the italic heading before paragraph 12, for “section 10A” substitute “ section 1M ”.

(7) In paragraph 12A(1) and (5), and in the italic heading before paragraph 12, for “section 10A” substitute “ section 1M ”.

90

(1) Schedule 5 (attribution of gains to settlors with interest in non-resident or dual resident settlements) is amended as follows.

(2) In paragraph 1(1), for “section 3” substitute “ section 1K ”.

(3) In paragraph 1(2)(a), for “section 2(2)” substitute “ section 1(3) ”.

(4) In paragraph 1(3)—

(a) in paragraph (b), for “section 13” substitute “ section 3 ”, and

(b) in the second sentence—

(i) for “Subsections (12) and (13) of section 13” substitute “ Section 3B(1) to (3) ”, and

(ii) for “that section” substitute “ section 3 ”.

91

In Schedule 7A (restriction on set-off of pre-entry losses), in paragraph 6(1)(c) and (d), for “section 8(1)” substitute “ section 2A(1) ”.

92

In Schedule 7AC (exemptions for disposals by companies with substantial shareholdings), in paragraph 3(2)(c)(ii), for the words from “would” to “purposes” substitute “ would be chargeable to corporation tax as a result of section 2B(3) or (4) ”.

93

In Schedule 7C (relief for transfers to Schedule 2 share plans), in paragraph 8—

(a) in paragraph (a), for “under section 2(1)” substitute “ as a result of section 1A(1) ”, and

(b) in paragraph (b), for “under section 10(1)” substitute “ as a result of section 1A(3)(a) ”.

IHTA 1984

94

IHTA 1984 is amended as follows.

95

In Schedule A1 (non-excluded overseas property), in paragraph 8(3)—

(a) in the definition of “interest in UK land”, for the words from “the meaning” to the end substitute “ the same meaning as it has for the purposes of section 1A(3)(b) of the 1992 Act (see section 1C of that Act); ”,

(b) in the definition of “dwelling”, for the words from “the meaning” to the end substitute “ the same meaning as it has for the purposes of Schedule 1B to the 1992 Act; ”, and

(c) in the definition of “contract for an off-plan purchase”, for the words from “has the meaning” to the end substitute “ means a contract for the acquisition of land consisting of, or including, a building, or part of a building, that is to be constructed or adapted for use as a dwelling. ”

FA 2005

96

FA 2005 is amended as follows.

97

(1) Section 32 (non-UK resident vulnerable persons: amount of relief) is amended as follows.

(2) In subsection (3), in the definitions of “TLVB” and “TLVA”, omit “for the purposes of section 3 of TCGA 1992”.

(3) After that subsection insert—

(3A) For the purposes of this section “the vulnerable person's taxable amount for the tax year” means the amount on which that person would be chargeable to capital gains tax for the tax year if no account were taken of section 1K of TCGA 1992.

98

(1) Schedule 1 (non-UK resident vulnerable persons: interpretation) is amended as follows.

(2) In paragraph 3—

(a) in sub-paragraph (1)(a), for “for the purposes of section 3 of TCGA 1992” substitute “ (as defined by section 32(3A)) ”,

(b) in sub-paragraph (1)(b), for “for the purposes of that section” substitute “ (as defined by section 32(3A)) ”,

(i) in paragraph (a), for “section 2(2)(b)” substitute “ section 1(3)(b) ”, and

(ii) omit paragraph (b) (together with the “and” before it).

(3) In paragraph 7—

(a) in sub-paragraph (1)(b), for “subsection (3) of that section” substitute “ section 1E(2) of that Act ”, and

(b) in sub-paragraph (2), for “section 10A” substitute “ section 1M ”.

ITA 2007

99

ITA 2007 is amended as follows.

100

In section 641 (accrued income profits and losses: trustees of a disabled person's trusts), in subsection (4), in the definition of “disabled person's trusts”, for “paragraph 1(1) of Schedule 1” substitute “ paragraph 3 of Schedule 1C ”.

101

In section 643 (accrued income profits and losses: non-residents), in subsection (5), for “section 10(6)” substitute “ section 1B(5) ”.

102

In section 809F (remittance basis: effect on what is chargeable), in subsection (4), for “section 12 of TCGA 1992” substitute “ paragraph 1 of Schedule 1 to TCGA 1992 ”.

103

In section 809G (claim for remittance basis: effect on allowances etc), in subsection (3), for “section 3(1A)” substitute “ section 1K(6) ”.

104

In section 809K (introduction to rules on remittance of income and gains), in subsection (1), for paragraph (e) substitute—

(e) Schedule 1 to TCGA 1992 (UK resident individuals not domiciled in UK).

105

In section 809VK (retention of funds to meet CGT liabilities), for subsection (5) substitute—

(5) The highest potential CGT rate is the highest rate specified in section 1H of TCGA 1992 (regardless of the type of the chargeable gain or, if P is an individual, the rate of income tax at which P's income is chargeable).

106

(1) Section 809YD (chargeable gains accruing on sales of exempt property) is amended as follows.

(2) In subsection (1)(c)(ii), for “section 13” substitute “ section 3 ”.

(3) In subsection (3), for “section 12 of TCGA 1992” substitute “ paragraph 1 of Schedule 1 to TCGA 1992 ”.

(4) In subsection (5)(a)—

(a) for “section 10A” substitute “ section 1M ”, and

(b) for “the year of return” substitute “ the tax year that consists of or includes the period of return ”.

(5) In subsection (7)—

(a) in the opening words, for “fell within the definition of foreign chargeable gains in section 12(4) of that Act” substitute “ accrued on the disposal of a foreign asset (within the meaning of Schedule 1 to TCGA 1992) ”, and

(b) for paragraphs (a) to (d) substitute—

(a) section 1M, (b) section 3D, and (c) Schedule 1.

(6) In subsection (8), for “section 14A(2)” substitute “ section 3D(2) ”.

107

In section 809Z7 (meaning of “foreign income and gains” etc), in subsection (5), for the words from “are the foreign” to the end substitute “ are the chargeable gains accruing to the individual in that year on the disposal of foreign assets (within the meaning of Schedule 1 to TCGA 1992) ”.

CTA 2009

108

CTA 2009 is amended as follows.

109

In section 2 (charge to corporation tax), omit subsection (2A).

110

(1) Section 5 of CTA 2009 (territorial scope of charge to corporation tax) is amended as follows.

(2) In subsections (1), (2A) and (3), for “chargeable to corporation tax” substitute “ chargeable to corporation tax on income ”.

(3) In subsection (2), for “within the charge to corporation tax” substitute “ within the charge to corporation tax on income ”.

(4) After subsection (4) insert—

(5) The territorial scope of the charge to corporation tax on chargeable gains is given by section 2B of TCGA 1992.

111

In section 18A (exemption for profits or losses of foreign permanent establishments), after subsection (2A) insert—

(2B) Profits and losses are not to be left out of account as mentioned in subsection (2) so far as, if the company were non-UK resident, they would be gains or losses accruing on disposals of assets within section 2B(4)(a) or (b) of TCGA 1992 (interests in UK land or other assets deriving at least 75% of their value from UK land).

112

(1) Section 19 (chargeable profits) is amended as follows.

(2) In subsection (1), after “applies” insert “ for the purposes of the charge to corporation tax on income ”.

(3) In subsection (3)—

(a) at the end of paragraph (a), insert “ and ”, and

(b) omit paragraph (c).

(4) After subsection (3) insert—

(4) For the purposes of the charge to corporation tax on chargeable gains accruing to the company, see section 2B(3) of TCGA 1992. (5) That subsection provides (among other things) that the gains are chargeable to corporation tax only so far as they are attributable to the permanent establishment in accordance with sections 20 to 32 of this Act.

CTA 2010

113

CTA 2010 is amended as follows.

114

In section 533 (financial statements: supplementary), after subsection (1) insert—

(1A) The profits and gains of the UK property rental business of a non-UK member of the group are to be treated as if they were profits and gains of a UK resident member of the group for the purposes of a financial statement under section 532(2)(a).

115

After section 535 insert—

(535A) (1) This section applies if— (a) a company (“A”) which is, or is a member of, a UK REIT disposes of an asset, and (b) the asset consists of a right or an interest in a company (“B”) which is UK property rich. (2) The appropriate proportion of a gain accruing to A on the disposal is not a chargeable gain. (3) The asset disposed of is regarded for the purposes of section 550 as used for the purposes of A's property rental business to an extent equal to the appropriate proportion. (4) In the case of a non-UK member of a group UK REIT, this section has effect as if any reference to property rental business of the member were to its UK property rental business. (5) In relation to a disposal of a right or interest in B— (a) B is “UK property rich” for the purposes of this section if the disposal would be regarded for the purposes of Schedule 1A to TCGA 1992 as a disposal of an asset deriving at least 75% of its value from UK land, and (b) any reference in this section to “the appropriate proportion” is to the proportion that, at the beginning of the accounting period in which the disposal is made, the value of B's relevant PRB assets bears to the total value of B's assets. (6) For the purposes of subsection (5)(b)— (a) “the value of B's relevant PRB assets” means the value of B's assets deriving (directly or indirectly) from assets used for the purposes of UK property rental business, (b) B's assets are to be valued in accordance with section 533(1)(d), and (c) if the asset disposed of was acquired after the beginning of the accounting period, it is to be assumed that an accounting period began on the day on which the disposal is made. (7) Any reference in this section to the disposal of a right or interest in B includes the disposal of a right or interest in an offshore collective investment vehicle (a “relevant fund”)— (a) to which paragraph 8 of Schedule 5AAA to TCGA 1992 applies, but (b) in relation to which an election under that paragraph has not been made. (8) In the case of a disposal which is, as a result of subsection (7), a disposal of a right or interest in B, the value of B's relevant PRB assets for the purposes of subsection (5)(b) is taken to be— (a) the value of B's assets that are used for the purposes of UK property rental business, plus (b) the value of B's assets deriving indirectly from assets held by a relevant fund that are used for the purposes of UK property rental business. (9) This section is to be read as if it were contained in TCGA 1992. (10) Apart from subsection (7) of section 535, nothing else in that section applies in relation to a disposal to which this section applies. (11) This section does not apply to a gain— (a) if sub-paragraph (3) of paragraph 3A of Schedule 7AC to TCGA 1992 applies in relation to the gain (no chargeable gain accruing on disposals of certain shares by qualifying institutional investors), or (b) so far as sub-paragraph (4) of that paragraph applies to reduce the amount of the gain. (535B) (1) In determining the amount of a gain accruing to a company which is not to be a chargeable gain as a result of section 535A, any pre-April 2019 residual business losses or deficits which— (a) have not been deducted from (or taken into account in calculating) other profits or gains (of any kind) of the company or any other person, and (b) have not previously been deducted under this subsection, may be deducted from the gain. (2) For this purpose “pre-April 2019 residual business losses or deficits” means— (a) allowable losses accruing on disposals made before 6 April 2019, or (b) deficits or other losses for accounting periods ending before that date, which would otherwise have been deducted from (or taken into account in calculating) profits or gains (of any kind) accruing to residual business of the company. (3) If an accounting period (a “straddling period”) begins before and ends on or after 6 April 2019— (a) so much of the straddling period as falls before that date, and so much of it as falls on or after that date, are to be treated as separate accounting periods, and (b) if it is necessary to apportion an amount for the straddling period to the two separate accounting periods, it is to be apportioned— (i) on a time basis according to the respective length of the separate accounting periods, or (ii) if that would produce a result that is unjust or unreasonable, on a just and reasonable basis.

116

In section 547 (funds awaiting reinvestment), at the end insert—

(6) This section also applies to proceeds held in cash by a company on a disposal of an asset so far as section 535A secures that the appropriate proportion of a gain or loss accruing on the disposal is not a chargeable gain or allowable loss.

117

In section 550(3) (attribution of distributions), after “section 535” insert “ or 535A ”.

118

(1) Section 556 (disposal of assets) is amended as follows.

(2) After subsection (3) insert—

(3A) Subsection (3B) applies in the case of a company (“C”) which is, or is a member of, a UK REIT if— (a) one or more properties acquired (directly or indirectly) by a relevant UK property rich company have been developed since acquisition, (b) the cost of the development exceeds 30% of the fair value of the property (determined in accordance with international accounting standards) at entry or at acquisition, whichever is later, (c) C disposes of any of its rights or interests in the relevant UK property rich company, (d) the disposal is made within the period of 3 years beginning with the completion of the development, and (e) if C is a member of a UK REIT, the disposal is not to another member of the UK REIT. (3B) If this subsection applies, section 535A is not to apply in relation to so much of the amount of a gain accruing on the disposal as relates to the property which has been developed. (3C) For the purposes of subsection (3A)— (a) a company is a “relevant UK property rich company” if, as a result of section 535A, any part of a gain accruing to C on a disposal of a right or interest in the company would not be a chargeable gain, and (b) a relevant UK property rich company acquires property “indirectly” if property is acquired by someone other than the relevant UK property rich company and the property is taken into account in determining the value of the assets of the relevant UK property rich company.

(3) In subsection (7), for “Section 535 is” substitute “ Sections 535 and 535A are ”.

119

In section 582 (early exit), in subsection (3)(b), for “or 535(1)” substitute “ , 535(1) or 535A ”.

PART 3 — Commencement and transitional provisions etc

120

(1) The amendments made by this Schedule have effect—

(a) for the purposes of capital gains tax, for the tax year 2019-20 and subsequent tax years, and

(b) for the purposes of corporation tax, for accounting periods beginning on or after 6 April 2019.

(2) The amendments made by this Schedule also have effect for the purposes of corporation tax in relation to disposals made on or after 6 April 2019 (whether in their application to accounting periods beginning on, and ending on or after, that date or to later accounting periods).

121

(1) This paragraph applies to—

(a) allowable NRCGT losses accruing to a person before 6 April 2019, and

(b) ring-fenced ATED-related allowable losses accruing to a person before that date,

so far as they have not been deducted under section 2B, 8(1)(b)(ii), 14D or 188D of TCGA 1992 (as those provisions have effect before the amendments made by this Schedule) from chargeable gains accruing before that date.

(2) If losses to which this paragraph applies accrued to a company, they are deductible in accordance with section 2A(1) of TCGA 1992 as if they had accrued to the company while it was within the charge to corporation tax.

(3) If losses to which this paragraph applies accrued to any other person, they—

(a) are deductible in accordance with section 1(3) of TCGA 1992, and

(b) are to be treated for the purposes of section 1E of TCGA 1992 as if they accrued on a disposal of assets that were within section 1A(3) of that Act.

(4) In this paragraph—

(a) the reference to allowable NRCGT losses is to be read in accordance with Schedule 4ZZB to TCGA 1992 (as that Schedule has effect before its repeal by this Schedule), and

(b) the reference to ring-fenced ATED-related allowable losses is to be read in accordance with section 2B of that Act (as that section has effect before its repeal by this Schedule).

122

The Treasury may by regulations make any transitional provisions or savings that they consider appropriate in connection with the coming into force of any provision made by this Schedule.

123

(1) This paragraph applies where this Schedule re-enacts in TCGA 1992 (with or without modification) an enactment contained in TCGA 1992 repealed by this Schedule.

(2) The repeal and re-enactment does not affect the continuity of the law.

(3) Any subordinate legislation or other thing which—

(a) has been made or done, or has effect as if made or done, under or for the purposes of the repealed provision, and

(b) is in force or effective on 5 April 2019,

has effect in relation to times after that date as if made or done under or for the purposes of the corresponding provision of TCGA 1992.

(4) Any reference (express or implied) in any enactment, instrument or document to a provision of TCGA 1992 is to be read as including, in relation to times, circumstances or purposes in relation to which the corresponding repealed provision had effect, a reference to that corresponding provision.

(5) Any reference (express or implied) in any enactment, instrument or document to a repealed provision of TCGA 1992 is to be read as including, in relation to times, circumstances or purposes in relation to which the corresponding provision has effect, as or (as the context may require) as including a reference to that corresponding provision.

(6) The generality of this paragraph is not to be affected by specific transitional, transitory or saving provision made elsewhere by this Schedule.

(7) This paragraph has effect instead of section 17(2) of the Interpretation Act 1978.

124

The Treasury may by regulations make such provision as they consider appropriate in consequence of the provision made by this Schedule.

125

(1) The Treasury may by regulations make provision, in relation to a case in which they consider that a provision of this Schedule changes the effect of a provision of TCGA 1992 that is re-enacted by this Schedule, for the purpose of returning the effect of the law to what it would have been if this Act had not been passed.

(2) The power conferred by this paragraph may not be exercised on or after 6 April 2022.

126

(1) This paragraph applies to regulations made under paragraph 124 or 125.

(2) The regulations may amend, repeal or revoke any provision made by or under—

(a) this Schedule, or

(b) any other provision of the Taxes Acts (within the meaning of section 118(1) of TMA 1970).

(3) The regulations may, if made before 6 April 2020, contain provision (however expressed) for securing that the provision made by the regulations has effect in accordance with paragraph 120 (commencement) as it were included in the amendments made by this Schedule.

(4) The regulations may contain incidental, supplemental, consequential or transitional provision or savings.

SCHEDULE 2

PART 1 — Returns and payments on account: disposals of UK land etc

Disposals to which Schedule applies

1

(1) This Schedule applies for the purposes of capital gains tax to—

(a) any direct or indirect disposal of UK land which meets the non-residence condition (whether or not a gain accrues) and which is made on or after 6 April 2019, and

(b) any other direct disposal of UK land on which a residential property gain accrues and which is made on or after 6 April 2020,

but this Schedule does not apply to excluded disposals.

(2) A disposal is an excluded disposal if—

(a) it is a disposal on which, as a result of any of the no gain/no loss provisions, neither a gain nor a loss accrues,

(b) it is the grant of a lease for no premium to a person not connected with the grantor under a bargain made at arm's length,

(d) it is a disposal of any pension scheme investments.

(3) The Treasury may by regulations amend sub-paragraph (2).

(4) See also paragraph 9 for a case where a disposal which would have been within sub-paragraph (1)(b) if a gain had accrued is treated, for certain purposes, as if it were a disposal to which this Schedule applies.

2

(1) A disposal is a “direct or indirect disposal of UK land which meets the non-residence condition” if it is—

(a) a disposal on which a gain accrues that falls to be dealt with by section 1A(3) of TCGA 1992 because the asset disposed of is within paragraph (b) or (c) of that subsection,

(b) a disposal on which a gain accrues that falls to be dealt with by section 1A(1) of that Act in accordance with section 1G(2) because the asset disposed of is within section 1A(3)(b) or (c), or

(c) a disposal of an asset on which a gain does not accrue but which, had a gain accrued, would fall to be dealt with as mentioned in either of the preceding paragraphs of this sub-paragraph.

(2) A disposal is “any other direct disposal of UK land on which a residential property gain accrues” if the disposal is a disposal on which a residential property gain accrues where—

(a) the land in question is in the United Kingdom, and

(b) the gain falls to be dealt with by section 1A(1) or (3)(a) of TCGA 1992,

and the disposal does not fall within sub-paragraph (1).

(3) This paragraph applies for the purposes of this Part of this Schedule.

Obligation to deliver a return to officer of Revenue and Customs

3

(1) If a person makes a disposal to which this Schedule applies, the person—

(a) must make a return in respect of the disposal, and

(b) must deliver the return to an officer of Revenue and Customs on or before the 60th day following the day of the completion of the disposal.

(2) If—

(a) a person makes two or more disposals to which this Schedule applies, and

(b) the disposals are made in the same tax year with the same completion date,

the person must make and deliver a single return with respect to the disposals.

(3) This paragraph is subject to—

(a) paragraph 4 (residential property gain accruing but no payment on account required),

(b) paragraph 5 (ordinary tax return already delivered etc), and

4

(1) If—

(a) a person makes a disposal to which this Schedule applies as a result of paragraph 1(1)(b), and

(b) the person would not be liable under paragraph 6 to pay an amount on account of the person's liability to capital gains tax for the tax year concerned,

the person is not required to make or deliver a return under this Schedule in respect of the disposal.

(2) In determining whether sub-paragraph (1)(b) applies, it is to be assumed that the person is required to make a return under this Schedule in respect of the disposal.

5

(1) A person is not required to make or deliver a return under this Schedule in respect of a disposal if the filing date for the return would otherwise fall on or after—

(a) the date on which the person has delivered to an officer of Revenue and Customs the person's ordinary tax return containing a self-assessment that takes account of the disposal, or

(b) the date on or before which the person has (by notice) been required to deliver to an officer of Revenue and Customs the person's ordinary tax return for the tax year concerned.

(2) For the purposes of sub-paragraph (1)(a), a self-assessment does not take account of the disposal if the amount of capital gains tax that is self-assessed is less than the amount that would be payable under paragraph 6 if the person were required to make and deliver a return under this Schedule in respect of the disposal.

Obligation to make a payment on account of capital gains tax

6

(1) This paragraph applies if—

(a) a person is required to make a return under this Schedule in respect of any disposal, and

(b) as at the filing date for the return, an amount of capital gains tax is notionally chargeable on the person (as determined in accordance with paragraph 7).

(2) The person is liable to pay that amount on account of the person's liability to capital gains tax for the tax year concerned so far as that amount has not already become payable as a result of any previous return under this Schedule in respect of a disposal in that period.

(3) The amount is payable on the filing date for the return.

(4) For cases where there are repayments of amounts previously paid on account of capital gains tax, see paragraphs 8 and 9.

Calculation of an amount of capital gains tax notionally chargeable

7

(1) This paragraph applies for determining the amount of capital gains tax (if any) which is notionally chargeable on a person as at the filing date for a return.

(2) The amount of capital gains tax notionally chargeable on the person as at that date is the amount of that tax for which the person would be liable for the tax year concerned, ignoring, for this purpose, the following disposals—

(a) disposals which have a completion date later than the completion date of the disposal in respect of which the return is made (but see sub-paragraph (3)), and

(b) disposals on which gains accrue but which are not disposals to which this Schedule applies.

(3) A disposal on which a loss accrues is not to be ignored under sub-paragraph (2)(a) if the time at which the disposal is made (as determined under section 28 of TCGA 1992) falls on or before the completion date of the disposal in respect of which the return is made.

(3A) In the case of a disposal to which this Schedule applies as a result of paragraph 1(1)(b) where a proportion of the chargeable gain accruing on the disposal is not a residential property gain, ignore that proportion for the purposes of this paragraph.

(4) For provision relevant to the operation of this paragraph, see paragraphs 14 and 15 (making of assumptions, reasonable estimates etc).

Repayments of amounts previously paid on account of capital gains tax

8

(1) This paragraph applies if—

(a) a person makes and delivers a return under this Schedule in respect of a disposal,

(b) the person has previously paid amounts on account of the person's liability to capital gains tax for the tax year concerned, and

(c) the amounts exceed the amount of capital gains tax notionally chargeable on the person as at the filing date for the return.

(2) The excess is repayable to the person on the filing date for the return.

(3) In determining the total amount of payments that have, at any time, been made on account of a person's liability to capital gains tax for a tax year, account must be taken of amounts already repaid under this paragraph.

9

(1) If—

(a) a person makes a disposal on which an allowable loss accrues, and

(b) had a gain accrued instead, the disposal would have been one to which this Schedule applies as a result of paragraph 1(1)(b),

the person may make and deliver a return under this Schedule in respect of the disposal for the purpose of securing the application of paragraph 8.

(2) Accordingly, the disposal is treated for that purpose as if it were a disposal to which this Schedule applies.

(3) This paragraph does not apply in respect of a disposal if the filing date for the return which the person would otherwise be entitled to make and deliver falls on or after the date mentioned in paragraph 5(1)(a) or (b).

Collective investment vehicles to which Sch.5AAA to TCGA 1992 applies

10

(1) A person is not required to make or deliver a return under this Schedule in respect of a disposal if—

(a) the disposal has an appropriate connection to a collective investment vehicle for the purposes of paragraph 6 of Schedule 5AAA to TCGA 1992, and

(b) the person would not be liable under paragraph 6 of this Schedule to pay an amount on account of the person's liability to capital gains tax for the tax year concerned.

(2) In determining whether sub-paragraph (1)(b) applies, it is to be assumed that the person is required to make a return under this Schedule in respect of the disposal.

(3) If, by virtue of sub-paragraph (1), a person is not required to make or deliver a return under this Schedule in respect of a disposal, the person is not required to make a claim to obtain relief under section 6(2)(a) or (3)(a) of TIOPA 2010 in respect of the disposal (despite subsection (6) of that section).

11

(1) This paragraph applies if—

(a) an election under paragraph 8 of Schedule 5AAA to TCGA 1992 (election for CIV to be treated as partnership for purposes of Act) has effect in respect of an offshore collective investment vehicle (within the meaning of that Schedule),

(b) a disposal is made of property that is the subject of or held by the vehicle,

(d) a person is required to make a return under this Schedule in respect of the disposal.

(2) The disposal is treated for the purposes of this Part of this Schedule as if it completed on the day on which the election is made.

12

(1) This paragraph applies if—

(a) a disposal is deemed to have been made by a person as a result of paragraph 21 or 22 of Schedule 5AAA to TCGA 1992 (qualifying offshore CIV etc), and

(b) the person is required to make a return under this Schedule in respect of the disposal.

(2) If the disposal is one to which paragraph 23 of that Schedule applies (gains treated as accruing when value received)—

(a) a disposal to which this Schedule applies is treated as being made by the person on each occasion on which any part of the gain is treated as accruing to the person under that paragraph, and

(b) the time at which that disposal is treated as completing is the time at which the part of the gain is treated as so accruing to the person or, if later, the time at which the required notification is given to the person.

(3) If the disposal is not one to which paragraph 23 of Schedule 5AAA to TCGA 1992 applies, it is treated for the purposes of this Part of this Schedule as if it completed on the day on which the required notification is given to the person.

(4) In this paragraph “the required notification” means notification under paragraph 25 of Schedule 5AAA to TCGA 1992 in relation to the disposal deemed to have been made as a result of paragraph 21 or 22 of that Schedule.

(5) In determining for the purposes of sub-paragraph (1)(b) whether a person is required to make a return under this Schedule in respect of the disposal the effect of paragraphs 4, 5 and 10 is ignored.

Effect of s.144(2) or 144A(2)(b) of TCGA 1992 when asset sold on exercise of option

13

(1) This paragraph applies if—

(a) an option is granted binding the grantor to sell an asset and the grant of the option is a disposal to which this Schedule applies, and

(b) the option is then exercised so that, as a result of section 144(2) or 144A(2)(b) of TCGA 1992, the grant of the option is treated as the same transaction as the sale.

(2) Despite section 144(2) or 144A(2)(b) of TCGA 1992, the grantor remains subject to the obligations under this Schedule in relation to the grant of the option.

(3) In this paragraph references to sale are to be read in accordance with section 144(6) of TCGA 1992.

Making of assumptions, reasonable estimates etc

14

(1) If, in determining whether a disposal is one to which this Schedule applies—

(a) a question arises as to whether a provision of TCGA 1992 applies, and

(b) the determination of the question requires account to be taken of times after the completion of the disposal,

it is to be assumed that the provision does apply if, at the time of the completion of the disposal, it is reasonable to expect that it will apply.

(2) For the purposes of this Schedule it is to be assumed that a person has made a claim or election or given a notice if, at the time of the completion of the disposal in respect of which a return is required to be made under this Schedule, it is reasonable to expect that one will be made or given.

(3) Nothing in sub-paragraph (2) is to be read as affecting—

(a) any requirement imposed by or under any Act for a claim, election or notice to be made or given in a particular way or by a particular time, or

(b) any other provision made by or under any Act that is concerned with the making or giving of the claim, election or notice.

(4) If—

(a) a person is required to make and deliver a return under this Schedule, and

(b) having regard to the person's knowledge and all other relevant circumstances, it is reasonable to make an estimate of a qualifying matter,

the person may make a reasonable estimate of that matter in the return.

(5) For this purpose “qualifying matter” means—

(a) anything that is relevant to the application of section 1I of TCGA 1992,

(b) the value of anything, or

15

(1) This paragraph applies if a person is required to make and deliver a return under this Schedule in respect of a disposal and, at any time after the completion of the disposal—

(a) it becomes reasonable to expect that, by reference to the person's residence, a provision of TCGA 1992 will apply,

(b) it becomes reasonable to conclude that a provision of TCGA 1992 conferring a relief applies in relation to the disposal,

(c) matters relevant to the application of section 1I of TCGA 1992 become known, or it becomes reasonable to make a different estimate of those matters, where an estimate of those matters was used in the return, or

(d) the value of anything, or of any amount to be apportioned to anything, becomes known where an estimate was used in the return.

(2) The person may (but need not) assume, for the purposes of this Schedule—

(a) that there is an additional disposal to which this Schedule applies,

(b) that the additional disposal completed at the later time by reference to which this paragraph applies, and

(3) In determining the amount of capital gains tax notionally chargeable as at the filing date for a return in respect of the additional disposal, the actual disposal is ignored.

Contents of return

16

A return under this Schedule—

(a) must contain information of a description specified by an officer of Revenue and Customs (and different descriptions of information may be specified for different cases), and

(b) must include a declaration by the person making it that the return is, to the best of the person's knowledge, correct and complete.

Interpretation of “residential property gains”

16A

(1) In this Part of this Schedule “residential property gain” means so much of a chargeable gain accruing to a person on a disposal of residential property as, in accordance with paragraph 16B, is attributable to that property.

(2) The question whether or not a person disposes of residential property is determined in accordance with paragraphs 16C to 16G.

16B

(1) For the purposes of paragraph 16A the proportion of a chargeable gain attributable to residential property is equal to—

(a) the relevant fraction of the gain, and

(b) if there has been mixed use of the land to which the disposal relates on one or more days in the applicable period, the relevant fraction of the gain as adjusted, on a just and reasonable basis, to take account of the mixed use on the day or days.

(2) The relevant fraction is A/B where—

A is the number of days in the applicable period on which the land to which the disposal relates consists of or includes a dwelling, and

B is the total number of days in the applicable period.

(3) There is mixed use of land on any day on which the land consists of—

(a) one or more dwellings, and

(b) other land.

(4) If the disposal is of an interest in land subsisting under a contract for the acquisition of land consisting of or including a building that is to be constructed or adapted for use as a dwelling, that land is taken to consist of or include a dwelling throughout the applicable period.

(5) In this paragraph “the applicable period” means the period—

(a) beginning with the day on which the person making the disposal acquired the interest in land being disposed of or, if later, the day from which the interest in land became chargeable, and

(b) ending with the day before the day on which the disposal occurs.

(6) For the purposes of this paragraph an interest in land became “chargeable”—

(a) in any case where the disposal is of an interest in land in the United Kingdom—

(i) by a person in a tax year in which the person is not UK resident, or

(ii) by a person in the overseas part of a tax year which is, as respects the person, a split year,

from 6 April 2015, and

(b) in any other case, from 31 March 1982.

(7) If the interest in land disposed of by the person results from interests in land acquired by the person at different times, the person is regarded for the purposes of this paragraph as having acquired the interest disposed of at the time of the first acquisition.

16C

(1) For the purposes of paragraph 16A a person “disposes of residential property” if the person disposes of an interest in land in a case where—

(a) the land consisted of or included a dwelling at any time falling on or after the date on which the applicable period begins,

(b) the interest in land subsisted for the benefit of land that consisted of or included a dwelling at any time falling on or after that date, or

(c) the interest in land subsists under a contract for the acquisition of land consisting of or including a building that is to be constructed or adapted for use as a dwelling.

(2) No account is to be taken for the purposes of this paragraph of any time falling on (or after) the day on which the disposal is made.

16D

(1) For the purposes of paragraphs 16B to 16H an “interest in land” means—

(a) an estate, interest, right or power in or over land, or

(b) the benefit of an obligation, restriction or condition affecting the value of an estate, interest, right or power in or over land,

other than an excluded interest.

(2) The following interests are “excluded interests”—

(a) any interest or right held for securing the payment of money or the performance of any other obligation,

(b) a licence to use or occupy land,

(c) in relation to land in England and Wales or Northern Ireland, a tenancy at will or an advowson, franchise or manor, and

(d) such other descriptions of interest or right in relation to land as may be specified in regulations made by the Treasury.

(3) An interest or right is not within sub-paragraph (2)(a) if it is—

(a) a rentcharge, or

(b) in relation to land in Scotland, a feu duty or a payment mentioned in section 56(1) of the Abolition of Feudal Tenure etc. (Scotland) Act 2000.

(4) The grant of an option by a person binding the person to dispose of an interest in land is (so far as it would not otherwise be the case) regarded as a disposal of an interest in land by the person for the purposes of this Schedule.

(5) This does not affect the operation of section 144 in relation to the grant of the option (or otherwise).

(6) In applying the domestic concepts of law mentioned in this paragraph to land outside the United Kingdom, this paragraph is to be read so as to produce the result most closely corresponding with that produced in relation to land in the United Kingdom.

(7) In this paragraph—

“franchise” means a grant from the Crown such as the right to hold a market or fair, or the right to take tolls, and

“land” includes—buildings and structures, andland under the sea or otherwise covered by water.

16E

(1) For the purposes of paragraphs 16B to 16H a building is a dwelling at any time when—

(a) it is used, or suitable for use, as a dwelling, or

(b) it is in the process of being constructed or adapted for use as a dwelling,

and, in each case, it is not an institutional building.

(2) Land that at any time is, or is intended to be, occupied or enjoyed with a dwelling as a garden or grounds (including any building or structure) is taken to be part of the dwelling at that time.

(3) A building is an institutional building if—

(a) it is used as residential accommodation for school pupils,

(b) it is used as residential accommodation for members of the armed forces,

(d) it is used as a home or other institution providing residential accommodation with personal care for persons in need of personal care because of old age, disability, past or present dependence on alcohol or drugs or past or present mental disorder,

(e) it is used as a hospital or hospice,

(f) it is used as a prison or similar establishment,

(g) it is used as a hotel or inn or similar establishment,

(h) it is otherwise used, or suitable for use, as an institution that is the sole or main residence of its residents,

(i) it falls within—

(i) paragraph 4 of Schedule 14 to the Housing Act 2004 (buildings in England or Wales occupied by students and managed or controlled by educational establishment etc), or

(ii) any provision having effect in Scotland or Northern Ireland that is designated by regulations made by the Treasury as provision corresponding to paragraph 4 of that Schedule, or

(j) it qualifies in accordance with the next sub-paragraph as student accommodation.

(4) A building qualifies as student accommodation in accordance with this sub-paragraph at any time if the time falls in a tax year in which—

(a) the accommodation provided by the building includes at least 15 bedrooms,

(b) the accommodation is purpose-built, or is converted, for occupation by students, and

(5) Accommodation is to be regarded as occupied by persons as students if they occupy it wholly or mainly for undertaking a course of education (otherwise than as school pupils).

16F

(1) A building is treated for the purposes of paragraph 16E as continuing to be suitable for use as a dwelling at any time when it has become temporarily unsuitable for use as a dwelling.

(2) There is an exception to this rule if—

(a) the temporary unsuitability resulted from accidental damage to the building, and

(b) the damage resulted in the building becoming unsuitable for use as a dwelling for a period of at least 90 consecutive days (“the 90 day period”).

(3) This exception does not apply if the damage occurred in the course of work that—

(a) was being done for the purpose of altering the building, and

(b) itself involved, or could be expected to involve, making the building unsuitable for use as a dwelling for at least 30 consecutive days.

(4) If the exception applies, work done in the 90 day period to restore the building to suitability for use as a dwelling is not to count for the purposes of paragraph 16E as constructing or adapting the building for use as a dwelling.

(5) For the purposes of this paragraph—

(a) references to accidental damage include damage otherwise caused by events beyond the control of the person disposing of the interest in land,

(b) references to alteration of a building include its partial demolition, and

(6) For the purposes of this paragraph a building’s unsuitability for use as a dwelling is not regarded as temporary if paragraph 16G applies (disposal of a building that has undergone works).

16G

(1) If—

(a) a person disposes of an interest in land on which a building has been suitable for use as a dwelling, and

(b) as a result of qualifying works, the building has, at or before the time of completion of the disposal, ceased to exist or become unsuitable for use as a dwelling,

the building is to be regarded for the purposes of paragraph 16E as unsuitable for use as a dwelling throughout the works period.

(2) For the purposes of this paragraph works are “qualifying” works if—

(a) any planning permission or development consent required for the works, or for any change of use with which they are associated, has been granted (whether before or after completion), and

(b) the works have been carried out in accordance with the permission or consent.

(3) In this paragraph “the works period” means—

(a) the period when the works were in progress, and

(b) such period (if any) ending immediately before the start of the works throughout which the building was, for reasons connected with the works, not used as dwelling.

(4) If at any time when qualifying works are in progress—

(a) the building was undergoing any other work, or put to any other use, in relation to which planning permission or development consent was required but has not (at any time) been granted, or

(b) anything else was being done in contravention of a condition or requirement attached to a planning permission or development consent relating to the building,

the works period does not include that time.

(5) If sub-paragraph (1) would have applied but for the fact that, at the completion of the disposal, the works are not qualifying works, the works are regarded as not affecting the building's suitability for use as a dwelling at any time before the disposal.

16H

(1) For the purposes of paragraphs 16B to 16G a building is regarded as ceasing to exist from the time when either—

(a) it has been demolished completely to ground level, or

(b) it has been demolished to ground level except for a single facade (or a double facade if it is on a corner site) the retention of which is a condition or requirement of planning permission or development consent.

(2) For the purposes of paragraphs 16B to 16G the completion of the disposal of an interest in land is regarded as occurring—

(a) at the time of the disposal, or

(b) if the disposal is under a contract which is completed by a conveyance, transfer or other instrument, at the time when the instrument takes effect.

(3) For the purposes of paragraphs 16B to 16G—

“building” includes a part of a building,

“development consent” means—in the case of land in the United Kingdom, development consent under the Planning Act 2008, andin the case of land outside the United Kingdom, consent corresponding to development consent under that Act, and

planning permission“—in the case of land in England or Wales, has the meaning given by section 336(1) of the Town and Country Planning Act 1990,in the case of land in Scotland, has the meaning given by section 227(1) of the Town and Country Planning (Scotland) Act 1997,in the case of land in Northern Ireland, has the meaning given by Article 2(2) of the Planning (Northern Ireland) Order 1991, andin the case of land outside the United Kingdom, means permission corresponding to any planning permission in relation to land anywhere in the United Kingdom.

Other interpretation

17

(1) In this Part of this Schedule—

“the filing date”, in relation to a return in respect of a disposal, means the date on or before which the return in respect of the disposal must be delivered to an officer of Revenue and Customs,

“lease” has the meaning given by paragraph 10 of Schedule 8 to TCGA 1992,

“ordinary tax return” means a return under section 8 or 8A of TMA 1970,

“pension scheme investments” means investments held for the purposes of a registered pension scheme or an overseas pension scheme (and expressions used in this definition have the same meaning as they have in section 271(1A) of TCGA 1992),

“premium” has the meaning given by paragraph 10 of Schedule 8 to TCGA 1992,

... and

“the tax year concerned”, in relation to a disposal, means the tax year in which the disposal is made.

(2) In this Part of this Schedule the “completion” of a disposal is regarded as occurring—

(a) at the time of the disposal, or

(b) if the disposal is under a contract which is completed by a conveyance, transfer or other instrument later than the time of the disposal, at the time when the instrument takes effect.

(3) This Part of this Schedule has effect as if it were included in TCGA 1992.

PART 2 — Notification of chargeable amounts, amendments of returns, enquiries etc

Requirement to notify HMRC of amounts chargeable to tax

18

(1) A person is not required to give a notice under section 7 of TMA 1970 merely by reference to a chargeable gain accruing on a disposal if—

(a) the person delivers a return under this Schedule in respect of the disposal, and

(b) the return is delivered before the end of the notification period within the meaning of that section.

(2) But sub-paragraph (1) does not apply if the amount of capital gains tax notionally chargeable on the person as at the filing date for the return (as determined in accordance with paragraph 7) is less than the amount of capital gains tax for which the person is liable for the tax year concerned.

Amendments of returns

19

(1) The amendment provisions applicable to ordinary tax returns apply in relation to returns made by a person under this Schedule as they apply in relation to ordinary tax returns, but subject to the following limitations or other modifications.

(2) An amendment is permitted only so far as the return under this Schedule could, when originally delivered, have included the amendment by reference to things already done.

(3) A person may not make an amendment of a return under this Schedule in respect of a disposal at any time on or after—

(a) the date on which the person has delivered to an officer of Revenue and Customs the person's ordinary tax return containing a self-assessment that takes account of the disposal, or

(b) the date on or before which the person has (by notice) been required to deliver to an officer of Revenue and Customs the person's ordinary tax return for the tax year concerned.

(4) If a person is not required to deliver an ordinary tax return for the tax year concerned, the person may not make an amendment of a return under this Schedule more than 12 months after the last day for delivery of an ordinary tax return.

(5) For the purposes of this paragraph “the amendment provisions applicable to ordinary tax returns” means sections 9ZA and 9ZB of TMA 1970.

Enquiries

20

(1) The enquiry provisions apply in relation to returns made by a person under this Schedule as they apply in relation to ordinary tax returns, but subject as follows.

(2) If the person is required to deliver an ordinary tax return for the tax year concerned, the time allowed for giving a notice of enquiry into a return under this Schedule is the same as that allowed for giving a notice of enquiry into the ordinary tax return.

(3) If the person is not required to deliver an ordinary tax return for the tax year concerned, the time allowed for giving a notice of enquiry into a return under this Schedule is determined on the assumption that the person was required to deliver an ordinary tax return for that year and that it was delivered at the later of—

(a) the last day for delivery of an ordinary tax return, and

(b) the day on which the return under this Schedule was delivered.

(4) If there is an enquiry into a return under this Schedule—

(a) nothing in paragraph 8 requires any repayment to be made before the day on which the enquiry is completed, but

(b) the officer of Revenue and Customs concerned may, at any time before that day, make the repayment, on a provisional basis, to such extent as the officer thinks fit.

(5) If—

(a) a notice of enquiry (“the main enquiry notice”) is given at any time into an ordinary tax return for a tax year, and

(b) a notice of enquiry into a return under this Schedule has not been given, on or before that time, in respect of a disposal to which this Schedule applies which is made in that tax year,

the main enquiry notice is also taken to constitute a notice of enquiry into the return under this Schedule in respect of the disposal.

(6) If—

(a) a final closure notice (“the main closure notice”) is given at any time which completes an enquiry into an ordinary tax return for a tax year, and

(b) a final closure notice of an enquiry into a return under this Schedule has not been given, on or before that time, in respect of a disposal to which this Schedule applies which is made in that period,

the main closure notice is also taken to constitute a final closure notice of the enquiry into the return under this Schedule in respect of the disposal.

(7) For the purposes of this paragraph “the enquiry provisions” means sections 9A and 28A of TMA 1970 and the other provisions of that Act so far as they relate to those sections.

(8) Nothing in this paragraph is to be read as affecting the operation of the enquiry provisions in relation to ordinary tax returns.

Amendments of returns during enquiry etc

21

(1) For other provisions which, as a result of paragraph 19 and 20, are relevant to returns made by a person under this Schedule, see sections 9B and 9C of TMA 1970.

(2) In the case of Schedule 3ZA to TMA 1970 (date by which payment to be made after amendment or correction of self-assessment)—

(a) paragraph 1(2) of that Schedule has effect as if the reference to section 59B(3) and (4) of TMA 1970 included a reference to paragraph 7 of this Schedule, and

(b) the other provisions of that Schedule have effect in accordance with the provision made elsewhere by this Part of this Schedule (see, in particular, paragraph 24(3)).

(3) For provisions of that Schedule relevant to returns made by a person under this Schedule, see—

(a) paragraph 2 (amendment of return by taxpayer),

(b) paragraph 3 (correction of return by HMRC),

(d) paragraph 5 (amendment of return by closure notice).

Revenue determinations

22

(1) The Revenue determination provision applicable to ordinary tax returns applies in relation to returns made by a person under this Schedule as it applies in relation to ordinary tax returns, but subject to the following modifications.

(2) The modifications are that—

(a) any reference to being given a notice is to be read as a reference to being required to deliver a return under this Schedule,

(b) any reference to the filing date is to be read as a reference to the filing date within the meaning of this Part of this Schedule (but see paragraph (e)),

(c) any reference to the amounts to be determined is to be read as a reference to the amount of capital gains tax which is notionally chargeable on a person as at the filing date for a return under this Schedule,

(d) any reference in any enactment to the purposes for which a determination is to have effect is to be ignored, and

(e) the determination may not be made after the end of the period of 3 years beginning with the last day for delivery of an ordinary tax return.

(3) If—

(a) a determination is made as a result of this paragraph, but

(b) it is then superseded by a return made under this Schedule,

any amount which, as a result of the supersession, is payable or repayable under paragraph 6 or 8 is to be payable or repayable on the filing date for the return.

(4) For the purposes of this paragraph “the Revenue determination provision” means section 28C of TMA 1970.

Discovery assessments

23

(1) A return made by a person under this Schedule is treated for the purposes of the discovery provisions as if it were an assessment required to be included as part of the person's ordinary tax return (whether or not the person is actually required to deliver an ordinary tax return).

(2) References in the discovery provisions to an ordinary tax return for a tax year include a return under this Schedule made in respect of a disposal for the tax year concerned.

(3) For the purposes of this paragraph “the discovery provisions” means section 29 of TMA 1970 and the other provisions of that Act relating to that section.

Interpretation

24

(1) Expressions have the same meaning in this Part of this Schedule as they have in Part 1 of this Schedule (see paragraph 17).

(2) For the purposes of this Part of this Schedule any reference to the last day for delivery of an ordinary tax return is to 31 January in the tax year following the tax year concerned.

(3) A return made by a person under this Schedule is to be treated for the purposes of any provision made by or under TMA 1970 as if it contained a self-assessment of an amount of capital gains tax.

PART 3 — Consequential amendments

Amendments of TMA 1970

25

(1) TMA 1970 is amended as follows.

(2) Omit section 7A (disregard of certain NRCGT gains for purposes of section 7).

(3) Omit sections 12ZA to 12ZN (NRCGT returns) and the italic heading before those sections.

(4) In section 28A (completion of enquiry into personal or trustee return)—

(a) in subsection (1), omit “or 12ZM”, and

(b) in the heading, omit “or NRCGT return”.

(5) Omit section 28G (determination of amount notionally chargeable where no NRCGT return delivered).

(6) In section 29 (assessment where loss of tax discovered), omit subsection (7)(a)(ia).

(7) Omit section 29A (non-resident CGT disposals: determination of amount which should have been assessed).

(8) In section 34 (ordinary time limit of 4 years), omit subsection (1A).

(9) In section 42 (procedure for making claims etc), in subsection (11)(a)—

(a) omit “12ZB”, and

(b) after “12AA of this Act” insert “ or a return under Schedule 2 to the Finance Act 2019 ”.

(10) After section 59A insert—

(59AZA) For provision requiring payments to be made on account of capital gains tax, see Schedule 2 to the Finance Act 2019.

(11) Omit section 59AA (non-resident CGT disposals: payments on account of capital gains tax).

(12) In section 59B (payment of income tax and capital gains tax: assessments other than simple assessments)—

(a) in subsection (1)(b), for “or 59AA of this Act” substitute “ of this Act or under Schedule 2 to the Finance Act 2019 ”, and

(b) omit subsection (2A).

(13) In section 59BA (payment of income tax and capital gains tax: simple assessments), in subsection (2)(b), for “or 59AA” substitute “ of this Act or under Schedule 2 to the Finance Act 2019 ”.

(14) In section 107A (relevant trustees), in subsection (2)(b)—

(a) omit “, 59AA”, and

(b) after “59B of this Act” insert “ or under Schedule 2 to the Finance Act 2019 ”.

(15) In section 118 (interpretation), omit the definition of “NRCGT return”.

(16) In Schedule 3ZA (date by which payment to be made after amendment or correction of self-assessment)—

(a) in paragraph 1(1), omit “or an advance self-assessment (see section 12ZE(1))”,

(b) in paragraph 1(2), omit “59AA(2) or”,

(c) in paragraph 2(1), omit “or an amendment of an advance self-assessment under section 12K (amendment of NRCGT return by taxpayer)”,

(d) in paragraph 2(3), omit “or 12ZN(3)” and “or advance self-assessment”,

(e) in paragraph 3(1), omit “or 12ZL” and “or NRCGT return”, and

(f) in paragraph 5(1), omit “or advance self-assessment”.

Amendments of other Acts

26

(1) TCGA 1992 is amended as follows.

(2) In section 222A (determination of main residence: disposals by non-residents)—

(a) in subsection (6)(a), for “the NRCGT return” substitute “ the return under Schedule 2 to the Finance Act 2019 ”, and

(b) in subsection (7)(a), for “an NRCGT return” substitute “ a return under Schedule 2 to the Finance Act 2019 ”.

(3) In section 223A (amount of relief: disposals by non-residents), in subsection (3)(b), for “the NRCGT return” substitute “ the return under Schedule 2 to the Finance Act 2019 ”.

27

(1) Schedule 24 to FA 2007 (penalties for errors) is amended as follows.

(2) In paragraph 1(4), in the entry relating to capital gains tax, in the second column, for “section 12ZB of TMA 1970 (NRCGT return)” substitute “ Schedule 2 to FA 2019 ”.

(3) In paragraph 21C, for “section 59AA(2) of TMA 1970 (non-resident CGT disposals: payments on account of capital gains tax)” substitute “ Schedule 2 to FA 2019 ”.

28

(1) Schedule 36 to FA 2008 (information and inspection powers) is amended as follows.

(2) For paragraph 21ZA and the italic heading before it substitute—

(21ZA) (1) For the purposes of paragraph 21 any reference to the making by a person of a return under section 8 or 8A of TMA 1970 includes the making by the person of a return under Schedule 2 to FA 2019. (2) In the application of paragraph 21 in relation to a return under Schedule 2 to FA 2019, the return is to be treated as if it required a self-assessment of an amount of capital gains tax. (3) For the purposes of paragraph 21, the definition of “the notice of enquiry” in its application to a return under Schedule 2 to FA 2019 needs to be read in the light of the provision made by paragraph 20 of that Schedule.

29

(1) Schedule 55 to FA 2009 (penalty for failure to make returns etc) is amended as follows.

(2) In the table in paragraph 1(5), in item 2A, in the third column, for “NRCGT return under section 12ZB of TMA 1970” substitute “ Return under Schedule 2 to FA 2019 (other than one made under paragraph 9 or 15 of that Schedule) ”.

(3) Schedule 55 to FA 2009, as amended by this paragraph, is taken to have come into force for the purposes of returns under this Schedule on the day on which this Act is passed.

30

(1) Schedule 56 to FA 2009 (penalty for failure to make payments on time) is amended as follows.

(2) In paragraph 1, in the Table, after item 3A insert—

3B	Capital gains tax	Amount payable under paragraph 6 of Schedule 2 to FA 2019 where not included in a return under section 8 or 8A of TMA 1970	The date falling 30 days after 31 January in the tax year following the one in which the disposal was made

(3) In paragraph 3(1)(a), after “3” insert “ , 3B ”.

(4) In paragraph 5(3) of Schedule 11 to F(No.3)A 2010 (which amends paragraph 3(1)(a) of Schedule 56 to FA 2009), after “3” insert (in both places) “ 3B ”.

(5) Schedule 56 to FA 2009, as amended by this paragraph, is taken to have come into force for the purposes of returns under this Schedule on the day on which this Act is passed.

Late payment interest

31

So far as relating to amounts that are payable (or repayable) as a result of a requirement under this Schedule, sections 101 to 103 of FA 2009 (late payment interest on sums due to HMRC etc) come into force on 6 April 2019.

Commencement

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(1) The amendments made by this Part of this Schedule have effect in relation to disposals made on or after 6 April 2019.

(2) But section 12ZG of TMA 1970 (cases where advance self-assessment not required) continues to have effect in relation to disposals made on or after that date but before 6 April 2020; and that section has effect in relation to those disposals—

(a) as if references to an NRCGT return were to a return under this Schedule, and

(b) as if references to section 12ZE(1) of TMA 1970 were to paragraph 6 of this Schedule.

SCHEDULE 3

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SCHEDULE 4

Introduction and overview

1

(1) This Schedule contains provision about countering the tax effects of certain arrangements (“profit fragmentation arrangements”).

(2) Profit fragmentation arrangements involve the following parties—

(a) a person resident in the United Kingdom (“the resident party”),

(b) an overseas person or entity (“the overseas party”) who is not resident in the United Kingdom, and

(i) the resident party,

(ii) a member of a partnership of which the resident party is a partner, or

(iii) a participator in a company which is the resident party.

(3) An “overseas person or entity” means—

(a) a person abroad within the meaning given by section 718 of ITA 2007, or

(b) a company, partnership, trust or other entity or arrangements established or having effect under the law of a country or territory outside the United Kingdom (regardless of whether it has legal personality as a body corporate).

(4) Paragraphs 2 to 6 deal with the definition of profit fragmentation arrangements.

(5) Paragraph 7 deals with the adjustments which must be made to counteract the effects of such arrangements.

(6) Other provisions of this Schedule—

(a) deal with double taxation and the tax treatment of reimbursement payments (paragraphs 8 and 9), and

(b) deal with interpretation and commencement (paragraphs 10 to 12).

Profit fragmentation arrangements

2

(1) Arrangements are “profit fragmentation arrangements” if—

(a) provision has been made or imposed as between the resident party and the overseas party by means of the arrangements (“the material provision”),

(b) as a result of the material provision, value is transferred from the resident party to the overseas party which derives directly or indirectly from the profits of a business chargeable to income tax or corporation tax (see paragraph 3),

(c) the value transferred is greater than it would have been if it had resulted from provision made or imposed as between independent parties acting at arm's length, and

(d) any of the enjoyment conditions are met in relation to a related individual (see paragraph 4).

(2) But arrangements are not “profit fragmentation arrangements” if—

(a) the material provision does not result in a tax mismatch for a tax period of the resident party (see paragraphs 5 and 6), or

(b) it is not reasonable to conclude that the main purpose, or one of the main purposes, for which the arrangements were entered into was to obtain a tax advantage.

(3) For the purposes of sub-paragraph (1)(a) provision made or imposed as between a partnership of which the resident party is a member and the overseas party is to be regarded as provision made or imposed as between the resident party and the overseas party.

Transfer of value deriving directly or indirectly from a business

3

(1) In determining whether value deriving directly or indirectly from a business is transferred from the resident party to the overseas party, account is to be taken of any method, however indirect, by which—

(a) any property or right is transferred or transmitted, or

(b) the value of any property or right is enhanced or diminished.

(2) Sub-paragraph (1) applies in particular to—

(a) sales, contracts and other transactions made otherwise than for full consideration or for more than full consideration,

(b) any method by which any property or right, or the control of any property or right, is transferred or transmitted by assigning—

(i) share capital or other rights in a company,

(ii) rights in a partnership, or

(iii) an interest in settled property,

(c) the creation of an option affecting the disposition of any property or right and the giving of consideration for granting it,

(d) the creation of a requirement for consent affecting such a disposition and the giving of consideration for granting it,

(e) the creation of an embargo affecting such a disposition and the giving of consideration for releasing it, and

(f) the disposal of any property or right on the winding up, dissolution or termination of a company, partnership or trust.

(3) Value may be traced through any number of individuals, companies, partnerships, trusts and other entities or arrangements.

(4) The property held by a company, partnership, trust or other entity or under any arrangements must be attributed to the shareholders, partners or members, beneficiaries or other participants at each stage on a just and reasonable basis.

The enjoyment conditions

4

(1) The enjoyment conditions are met in relation to a related individual if—

(a) it is reasonable to conclude that some or all of the value transferred as a result of the material provision relates to something done by, or any property or purported right of, the individual, and

(b) either of the conditions in sub-paragraph (2) is met.

(2) The conditions are that—

(a) under the arrangements—

(i) the value transferred, or part of it, is so dealt with by any person as to be calculated at some time to enure for the benefit of the individual,

(ii) the value transferred, or part of it, operates to increase the value of any assets which the individual holds or are held for the benefit of the individual,

(iii) the individual receives or is entitled to receive any benefit provided or to be provided out of the value transferred or part of it,

(iv) the individual may become entitled to the beneficial enjoyment of the value transferred, or part of it, if one or more powers are exercised or successively exercised (and for those purposes it does not matter who may exercise the powers or whether they are exercisable with or without the consent of another person), or

(v) the individual (whether acting alone or together with any other person) is able in any manner to control directly or indirectly the application of the value transferred or part of it, or

(b) it is reasonable to conclude that the individual (whether acting alone or with any other person) procured the transfer of value from the resident party to the overseas party in such a way as to avoid the conditions in paragraph (a) being met.

(3) In determining whether the conditions in sub-paragraph (2)(a) are met in relation to an individual and the value transferred as a result of the material provision, all benefits which may at any time accrue to a person as a result of the value being transferred must be taken into account, irrespective of—

(a) the nature or form of the benefits, or

(b) whether the person has legal or equitable rights in respect of the benefits.

(4) For the purposes of sub-paragraphs (2) and (3), references to an individual include a reference to any person connected with that individual and, for the purposes of this paragraph, section 993 of ITA 2007 (meaning of “connected”) has effect but as if—

(a) subsection (4) of that section were omitted, and

(b) members of a partnership in which the individual is also a member were not “associates” of the individual for the purposes of sections 450 and 451 of CTA 2010 (“control”).

(5) For the purposes of sub-paragraph (4), an individual is treated as connected with a person or entity if—

(a) the individual or a person connected with the individual (whether acting alone or with any other person)—

(i) is able to secure that the person or entity acts in accordance with the wishes of the individual or any person connected with the individual,

(ii) is able to acquire rights which would enable the individual or any person connected with the individual to secure that the person or entity acts in accordance with the wishes of the individual or any person connected with the individual, or

(iii) is able to exercise significant influence over the person or entity (whether or not as a result of a legal entitlement of the individual or any person connected with the individual), or

(b) the person or entity can reasonably be expected to act, or typically acts, in accordance with the wishes of the individual or a person connected with the individual.

Tax mismatch

5

(1) The material provision results in a tax mismatch for a tax period of the resident party if—

(a) in that period, in relation to a relevant tax, it results in one or both of—

(i) an increase in the expenses of the resident party for which a deduction is taken into account in calculating the amount of the relevant tax payable by the resident party, or

(ii) a reduction in the income of the resident party which would otherwise have been taken into account in calculating the amount of the relevant tax payable by the resident party,

(b) it is reasonable to conclude that—

(i) the resulting reduction in the amount of the relevant tax which is payable by the resident party exceeds the resulting increase in relevant taxes payable by the overseas party for the period corresponding to the tax period, and

(ii) the overseas party does not meet the 80% payment test, and

(2) In this Schedule references to “the tax reduction” are to the amount of the excess mentioned in sub-paragraph (1)(b)(i).

(3) It does not matter whether the tax reduction results from the application of different rates of tax, the operation of a relief, the exclusion of any amount from a charge to tax, or otherwise.

(4) “The 80% payment test” is met by the overseas party if the resulting increase in relevant taxes paid by that party as mentioned in sub-paragraph (1)(b)(i) is at least 80% of the amount of the resulting reduction in the amount of the relevant tax payable by the resident party.

(5) The results described in sub-paragraph (1)(a) and (b)(i) are exempted if they arise solely by reason of—

(a) contributions paid by an employer under a registered pension scheme, or overseas pension scheme, in respect of any individual,

(b) a payment to a charity,

(d) a payment to an offshore fund or authorised investment fund—

(i) which meets the genuine diversity of ownership condition (whether or not a clearance has been given to that effect), or

(ii) at least 75% of the investors in which are, throughout the accounting period, registered pension schemes, overseas pension schemes, charities or persons who cannot be liable for any relevant tax on the ground of sovereign immunity.

(6) In this paragraph and paragraph 6, where the overseas party does not have an actual period for the purposes of relevant taxes which coincides with the tax period of the resident party—

(a) references to the corresponding period of the overseas party in relation to that tax period are to a notional period of that party for the purposes of relevant taxes that would coincide with that tax period, and

(b) such apportionments as are just and reasonable are to be made to determine the income or tax liability of that party for that corresponding period.

(7) In this paragraph—

“relevant tax” means—income tax,corporation tax on income,a sum chargeable under section 269DA of CTA 2010 (surcharge on banking companies) as if it were an amount of corporation tax,a sum chargeable under section 330(1) of CTA 2010 (supplementary charge in respect of ring fence trades as if it were an amount of corporation tax), orany non-UK tax on income, and

“tax period”, in relation to a resident party, means—a tax year, orif the resident party is a company, an accounting period of that party.

Tax mismatch: resulting reduction and resulting increase

6

(1) For the purposes of paragraph 5, the resulting reduction in the resident party's liability to a relevant tax for a tax period is—

$$A × TR$where—A is the sum of—if there are expenses within paragraph 5(1)(a)(i), the lower of the amount of expenses and the amount of the deduction mentioned in that provision, andany reduction in income mentioned in paragraph 5(1)(a)(ii), andTR is the rate at which, assuming the resident party has profits equal to A chargeable to the relevant tax for the tax period, those profits would be chargeable to that tax.$

For this purpose, the rate at which those profits would be chargeable to that tax for that period is the highest rate at which that tax would be chargeable for that period if those profits were added to the resident party's total income.

(2) For the purposes of paragraph 5(1)(b) and (4), the resulting increase in relevant taxes payable by the overseas party for the period corresponding to the tax period is any increase in the total amount of relevant taxes that would fall to be paid by that party (and not refunded) assuming that—

(a) the overseas party's income for that period, in consequence of the material provision were an amount equal to A,

(b) account were taken of any deduction or relief (other than any qualifying deduction or qualifying loss relief) taken into account by the overseas party in determining that party's actual liability to any relevant taxes in consequence of the material provision, and

(i) under the law of any part of the United Kingdom or any country or territory outside the United Kingdom, and

(ii) under double taxation arrangements made in relation to any country or territory,

to minimise the amount of tax which would fall to be paid by the overseas party in the country or territory in question (other than steps to secure the benefit of any qualifying deduction or qualifying loss relief).

(3) The steps mentioned in sub-paragraph (2)(c) include—

(a) claiming, or otherwise securing the benefit of, reliefs, deductions, reductions or allowances, and

(b) making elections for tax purposes.

(4) For the purposes of this paragraph, any withholding tax which falls to be paid on payments made to the overseas party is (unless it is refunded) to be treated as tax which falls to be paid by that party (and not the person making the payment).

(5) For the purposes of this paragraph, an amount of tax payable by the overseas party is refunded if and to the extent that—

(a) any repayment of tax, or any payment in respect of a credit for tax, is made to any person, and

(b) that repayment or payment is directly or indirectly in respect of the whole or part of the amount of tax payable by the overseas party,

but an amount refunded is to be ignored if and to the extent that it results from qualifying loss relief obtained by that party.

(6) Where some or all of the overseas party's income is treated for the purposes of a relevant tax charged under the law of a country or territory outside the United Kingdom as the income of a person or persons other than the overseas party, in paragraph 5 and this paragraph—

(a) references to that party's liability to any tax (however expressed) include a reference to the liabilities of that person or those persons to the relevant tax,

(b) references to any tax being payable by that party (however expressed) include a reference to the relevant tax being payable by that person or those persons, and

(c) references to loss relief obtained by that party include a reference to loss relief obtained by that person or those persons,

and sub-paragraph (4) applies to that person or any of those persons as it applies to that party.

(7) In this paragraph—

“qualifying deduction” means a deduction which—is made in respect of actual expenditure of the overseas party,does not arise directly from the arrangements,is of a kind for which the resident party would have obtained a deduction in calculating that party's liability to any income tax or corporation tax had that party incurred the expenditure in respect of which the deduction is given, anddoes not exceed the amount of the deduction that the resident party would have so obtained,

“qualifying loss relief” means any means by which a loss might be used for tax purposes to reduce the amount in respect of which the overseas party is liable to tax on the profits of a business, and

“relevant tax” has the same meaning as in paragraph 5.

Adjustments required to be made in relation to arrangements

7

(1) Adjustments must be made so as to counteract the tax advantages that would (ignoring this Schedule) arise from profit fragmentation arrangements.

(2) The adjustments—

(a) must relate to the expenses, income, profits or losses of the resident party for the tax period in which value is transferred as a result of the material provision,

(b) must be based on what the value transferred would have been if it had resulted from a provision made or imposed as between independent parties acting at arm's length, and

(3) References in this paragraph to “the resident party” are references to the resident party at the time at which the material provision is made or imposed.

Double taxation

8

(1) This paragraph applies where—

(a) the resident party has paid a relevant tax by virtue of the application of paragraph 7,

(b) at any time, the resident party or another person pays—

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