Finance Act 2019

• (i) a further amount of the relevant tax, or

• (ii) an amount of non-UK tax corresponding to the relevant tax, and

• (c) the result is a double payment of tax calculated by reference to the same income or profits.

• (2) In order to avoid the double payment of tax, the resident party may make a claim in writing for one or more consequential adjustments to be made in respect of the tax paid mentioned in sub-paragraph (1)(a).

• (3) On a claim under this paragraph an officer of Revenue and Customs must make such of the consequential adjustments claimed (if any) as are just and reasonable.

• (4) The amount of any consequential adjustments must not exceed the lesser of—

• (a) the tax paid by the resident party as mentioned in sub-paragraph (1)(a), and

• (b) the tax paid as mentioned in sub-paragraph (1)(b).

• (5) Consequential adjustments may be made—

• (a) in respect of any tax period,

• (b) by way of an assessment, the modification of an assessment, the amendment of a claim or otherwise, and

• (c) despite any time limit imposed by or under any enactment.

Reimbursement payments ignored for tax purposes

9

In calculating income, profits or losses for any tax purposes, no account is to be taken of any amount which is paid (directly or indirectly) by a person for the purposes of meeting or reimbursing the cost of tax charged on the resident party by virtue of the application of paragraph 7.

Treatment of a person who is a member of a partnership

10

• (1) This paragraph applies where a person is a member of a partnership.

• (2) Any references in this Schedule to the expenses, income, profits or losses of, or to the adjustment of the expenses, income, profits or losses of, the person includes a reference to the person's share of the expenses, income, profits or losses of, or adjustment of the expenses, income, profits or losses of, the partnership.

• (3) For this purpose “the person's share” of an amount is determined by apportioning the amount between the members of the partnership on a just and reasonable basis.

Other defined terms

11

In this Schedule—

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

• “authorised investment fund” means—an open-ended investment company within the meaning of section 613 of CTA 2010, oran authorised unit trust within the meaning of section 616 of that Act,

• “business” includes any trade, profession or vocation,

• “employer” has the same meaning as in Part 4 of FA 2004 (see section 279(1) of that Act),

• “genuine diversity of ownership condition” means—in the case of an offshore fund, the genuine diversity of ownership condition in regulation 75 of the Offshore Funds (Tax) Regulations 2009 (S.I. 2009/3001), andin the case of an authorised investment fund, the genuine diversity of ownership condition in regulation 9A of the Authorised Investment Fund (Tax) Regulations 2006 (S.I. 2006/964),

• “material provision” has the same meaning as in paragraph 2,

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

• “offshore fund” has the same meaning as in section 354 of TIOPA 2010 (see section 355 of that Act),

• “the overseas party” has the meaning given by paragraph 1(2),

• “overseas pension scheme” has the same meaning as in Part 4 of FA 2004 (see section 150(7) of that Act),

• “participator” has the same meaning as in Part 10 of CTA 2010 (see section 454 of that Act),

• “partnership” includes an entity established under the law of a country or territory outside the United Kingdom of a similar character to a partnership, and “member” of a partnership is to be construed accordingly,

• “related individual” and “the resident party” have the meanings given by paragraph 1(2),

• “tax advantage” includes—relief or increased relief from income tax or corporation tax,repayment or increased repayment of income tax or corporation tax,avoidance or reduction of a charge or an assessment to income tax or corporation tax,avoidance of a possible assessment to income tax or corporation tax,deferral of a payment of tax or advancement of a repayment of tax, andavoidance of an obligation to deduct or account for tax,

• “tax period” has the meaning given by paragraph 5(7),

• “the tax reduction” has the meaning given by paragraph 5(2), and

• “trust” includes arrangements—which have effect under the law of a country or territory outside the United Kingdom, andunder which persons acting in a fiduciary capacity hold and administer property on behalf of other persons,and “beneficiaries”, in relation to such arrangements, is to be construed accordingly.

Commencement

12

This Schedule has effect—

• (a) for income tax purposes, in relation to any value transferred on or after 6 April 2019 as a result of a material provision, and

• (b) for corporation tax purposes, in relation to any value transferred on or after 1 April 2019 as a result of a material provision.

SCHEDULE 5

PART 1 — Extension of scope of charge

1

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

2

In subsection (2) (circumstances in which non-UK resident company is within the charge)—

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

• (b) after paragraph (b) insert

, (c) it carries on a UK property business, or (d) it has other UK property income.

3

After subsection (3) insert—

(3A) A non-UK resident company which carries on a UK property business is chargeable to corporation tax on income on all its profits that are— (a) profits of that business, or (b) profits arising from loan relationships or derivative contracts that the company is a party to for the purposes of that business. (3B) A non-UK resident company which has other UK property income is chargeable to corporation tax on income on all its profits that— (a) consist of that income, or (b) are profits arising from loan relationships or derivative contracts that the company is a party to for the purposes of enabling it to generate that income.

4

In subsection (4) for “(2A) and (3)” substitute “ and (2A) to (3B) ”.

5

At the end insert—

(6) In this Part “other UK property income” means income dealt with by any of the following Chapters of Part 4— (a) Chapter 7 (rent receivable in connection with a UK section 39(4) concern); (b) Chapter 8 (rent receivable for UK electric-line wayleaves); (c) Chapter 9 (post-cessation receipts arising from a UK property business).

PART 2 — Supplementary & Consequential amendments

FA 1998

6

• (1) Paragraph 2 of Schedule 18 to FA 1998 (duty to give notice of chargeability) is amended as follows.

• (2) After sub-paragraph (1) insert—

(1A) But a company is not required to give notice under sub-paragraph (1) in respect of an accounting period if for the period — (a) all the income on which it is chargeable to tax consists of payments on which it bears income tax by deduction, and (b) the company has no chargeable gains.

• (3) In sub-paragraph (2) for “The notice” substitute “ A notice required to be given under this paragraph ”.

FA 2004

7

After section 55 of FA 2004 insert—

(55A) (1) A company is not required to give notice under section 55 of the beginning of an accounting period if it reasonably expects that— (a) all the income on which it will be chargeable to corporation tax for the period will consist of payments on which it bears income tax by deduction, and (b) it will have no chargeable gains for the period. (2) Subsection (3) applies if— (a) by reason of subsection (1) a company is not required to give notice under section 55 of the beginning of an accounting period (“the unreported period”), and (b) a subsequent accounting period immediately follows the end of the unreported period. (3) The subsequent accounting period is to be treated for the purposes of section 55 as if it does not immediately follow the end of a previous accounting period. (4) If by reason of subsection (1) ceasing to apply a company becomes subject to the duty to give notice under section 55 of the beginning of an accounting period the notice must be given not later than three months after the date on which it becomes subject to that duty.

ITTOIA 2005

8

In Part 3 of ITTOIA 2005 (property businesses), omit section 362 (effect of company starting or ceasing to be within charge to income tax in respect of UK property business).

ITA 2007

9

In section 5 of ITA 2007 (income tax and companies) in paragraph (b) for the words from “the income” to the end substitute “ it is chargeable to corporation tax in respect of the income, or would be so chargeable but for an exemption. ”

CTA 2009

10

CTA 2009 is amended as follows.

11

In section 3 (exclusion of charge to income tax) in subsection (1)(b) (non-UK resident companies) for the words from “and—” to the end substitute “ and it is chargeable to corporation tax in respect of the income, or would be so chargeable but for an exemption ”.

12

In section 18A (exemption for profits or losses of foreign permanent establishments) in subsection (2A) for the words from “, or would” to the end substitute

or, if the company were non-UK resident, would be— (a) profits or losses of the company's trade of dealing in or developing UK land (see section 5B), (b) profits or losses of the company's UK property business, (c) profits consisting of the company's other UK property income, or (d) profits or losses arising from loan relationships or derivative contracts that the company is a party to for the purposes of its UK property business or for the purposes of enabling it to generate other UK property income.

13

In section 19 (chargeable profits) for subsection (2A) substitute—

(2A) But the company's “chargeable profits” do not include— (a) profits of a trade of dealing in or developing UK land (see section 5B), (b) profits of a UK property business, (c) profits consisting of other UK property income, or (d) profits arising from loan relationships or derivative contracts that the company is a party to for the purposes of its UK property business or for the purposes of enabling it to generate other UK property income.

14

In section 289 (effect of company starting or ceasing to be within charge to corporation tax) in subsection (1) for “a property business” substitute “ an overseas property business ”.

15

• (1) Section 301 (calculation of non-trading profits and deficits from loan relationships: non-trading credits and debits) is amended as follows.

• (2) In subsection (1) for “as follows” substitute “ in accordance with subsections (4) to (7) ”.

• (3) After subsection (1) insert—

(1A) But in the case of a non-UK resident company the only non-trading credits and non-trading debits to be used are those in respect of loan relationships that the company is a party to for a purpose mentioned in section 5(3A)(b) or (3B)(b).

16

In section 333 (company with loan relationship ceasing to be UK resident) in subsection (2)—

• (a) after “owed” insert

— (a)

, and

• (b) at the end insert

, (b) for the purposes of the company's trade of dealing in or developing UK land, (c) for the purposes of the company's UK property business, or (d) for the purposes of enabling the company to generate other UK property income (within the meaning given by section 5(6)).

17

• (1) Section 334 (non-UK resident company ceasing to hold loan relationship for UK permanent establishment) is amended as follows.

• (2) In the heading, for “UK permanent establishment” substitute “ section 333(2) purposes ”.

• (3) In subsection (1) for the words from “the purposes” to “United Kingdom” substitute “ section 333(2) purposes ”.

• (4) In subsection (3)(b) for “the purposes of the permanent establishment” substitute “ section 333(2) purposes ”.

• (5) After subsection (4) insert—

(5) An asset or liability ceases to be held or owed for section 333(2) purposes if and in so far as— (a) it ceases to be held or owed for any purposes mentioned in section 333(2), and (b) on doing so, it does not begin or continue to be held or owed for any of the other purposes so mentioned.

18

In section 574 (non-trading credits and debits to be brought into account under Part 5) after subsection (2) insert—

(2A) But in the case of a non-UK resident company subsection (2) applies only in relation to those credits or debits in respect of derivative contracts that the company is a party to for a purpose mentioned in section 5(3A)(b) or (3B)(b)

.

19

In section 609 (company with derivative contract ceasing to be UK resident) in subsection (2)—

• (a) after “owed” insert

— (a)

, and

• (b) at the end insert

, (b) for the purposes of the company's trade of dealing in or developing UK land, (c) for the purposes of the company's UK property business, or (d) for the purposes of enabling the company to generate other UK property income (within the meaning given by section 5(6)).

20

• (1) Section 610 (non-UK resident company ceasing to hold derivative contract for UK permanent establishment) is amended as follows.

• (2) In the heading, for “UK permanent establishment” substitute “ section 609(2) purposes ”.

• (3) In subsection (1) for the words from “the purposes” to “United Kingdom” substitute “ section 609(2) purposes ”.

• (4) In subsection (3)(b) for “the purposes of the permanent establishment” substitute “ section 609(2) purposes ”.

• (5) After subsection (4) insert—

(5) A right or liability ceases to be held or owed for section 609(2) purposes if and in so far as— (a) it ceases to be held or owed for any purposes mentioned in section 609(2), and (b) on doing so, it does not begin or continue to be held or owed for any of the other purposes so mentioned.

21

• (1) Section 697 (derivative contracts with non-UK residents: exceptions) is amended as follows.

• (2) For subsection (2) substitute—

(2) Section 696 does not apply if NR— (a) is chargeable to corporation tax or income tax in respect of income arising from the derivative contract (or would be if there were any such income), and (b) is a party to the derivative contract otherwise than as agent or nominee of another person.

• (3) In subsection (6) omit the definition of “relevant entity” and “, and” immediately before it.

22

In section 746 (“non-trading credits” and “non-trading debits”) in subsection (2) for paragraph (b) substitute—

(b) section 793A (effect of election to reallocate charge within group),

.

23

• (1) Section 792 (reallocation of charge within group) is amended as follows.

• (2) Omit subsection (5).

• (3) In subsection (6) for “makes further provision” substitute “ sets out further requirements ”.

• (4) After subsection (6) insert—

(6A) Section 793A makes provision about the effect of elections under this section.

• (5) In subsection (8) after “793” insert “ , 793A ”.

24

• (1) Section 793 (further requirements about elections under section 792) is amended as follows.

• (2) In subsection (1) for “or (3)” substitute “ , (3), (3A) or (3B) ”.

• (3) In subsection (3), in the words before paragraph (a), after “if” insert “ subsection (2) does not apply and ”

• (4) After subsection (3) insert—

(3A) This subsection applies if neither of subsections (2) and (3) apply and at the relevant time— (a) B carried on a trade of dealing in or developing UK land, and (b) B was not exempt from corporation tax in respect of profits of that trade because of arrangements that have effect under section 2(1) of TIOPA 2010. (3B) This subsection applies if none of subsections (2), (3) and (3A) apply and at the relevant time— (a) B carried on a UK property business, and (b) B was not exempt from corporation tax in respect of the income of its UK property business because of arrangements that have effect under section 2(1) of TIOPA 2010.

25

After section 793 insert—

(793A) (1) This section applies if an election is made under section 792. (2) If subsection (2) of section 793 applies to B the gain, or the part specified in the election, is treated as if it had accrued to B at the relevant time as a non-trading credit for the purposes of Chapter 6 (how credits and debits are given effect). (3) If subsection (3) of section 793 applies to B the gain, or the part specified in the election, is treated— (a) as if it had accrued to B at the relevant time as a non-trading credit for the purposes of Chapter 6, and (b) as if it had accrued in respect of an asset held for the purposes of a permanent establishment of B in the United Kingdom. (4) If subsection (3A) of section 793 applies to B the gain, or the part specified in the election, is treated for the purposes of Chapter 6 as if it had accrued to B at the relevant time as a credit in respect of an asset held for the purposes of B's trade of dealing in or developing UK land. (5) If subsection (3B) of section 793 applies to B the gain, or the part specified in the election, is treated for the purposes of Chapter 6 as if it had accrued to B at the relevant time as a credit in respect of an asset held for the purposes of B's UK property business.

26

In section 795 (recovery of charge from another group company or controlling director) in subsection (4) omit the words from “but” to “establishment”.

27

In section 863 (asset becoming chargeable intangible asset), in subsection (1)(b)—

• (a) after “held” insert

— (i)

, and

• (b) after “establishment,” insert—

(ii) for the purposes of a trade carried on by the company of dealing in or developing UK land, (iii) for the purposes of a UK property business carried on by the company, or (iv) for the purposes of enabling the company to generate other UK property income (within the meaning given by section 5(6)),

.

CTA 2010

28

CTA 2010 is amended as follows.

29

• (1) Section 9 (non-UK resident company preparing return of accounts in currency other than sterling) is amended as follows.

• (2) For subsection (1) substitute—

(1) This section applies if a non-UK resident company within the charge to corporation tax prepares its return of accounts for a period of account in a currency other than sterling (the “accounts currency”).

• (3) In subsection (4) omit from “of its” to “United Kingdom”.

30

In section 107 (group relief: restriction on losses etc surrenderable by non-UK resident) in subsection (1) for “company” (in the second place it occurs) to the end substitute “ company within the charge to corporation tax ”.

31

In section 188BI (group relief for carried-forward losses: restriction on surrender of losses made when non-UK resident) in subsection (1) for “company” (in the second place it occurs) to the end substitute “ company within the charge to corporation tax ”.

TIOPA 2010

32

Part 10 of TIOPA 2010 (corporate interest restriction) is amended as follows.

33

• (1) Section 415 (qualifying net group-interest expense: interpretation) is amended as follows.

• (2) In subsection (1) for paragraph (b) substitute—

(b) either— (i) the condition in subsection (1A) is met, or (ii) any of the conditions in subsection (2) is met in relation to the guarantee, indemnity or other financial assistance in question”.

• (3) After subsection (1) insert—

(1A) The condition is that— (a) the member in question is a company that has not been UK resident at any time before 29 October 2018, (b) the financial assistance in question is provided before that date, and (c) the financial assistance in question is in respect of a loan relationship, derivative contract or relevant arrangement or transaction (within the meaning of section 382(4)) to which the member in question is a party for the purposes of its UK property business.

34

In section 438 (exemption for interest payable to third parties etc) after subsection (5) insert—

(5A) For the purposes of subsection (4) a guarantee, indemnity or other financial assistance in favour of the creditor is also ignored if— (a) it is provided before 29 October 2018, (b) the company concerned has not been UK resident at any time before that date, and (c) the amount concerned is in respect of a loan relationship, derivative contract or relevant arrangement or transaction (within the meaning of section 382(4)) to which the member in question is a party for the purposes of its UK property business.

PART 3 — Commencement and transitional provisions

Commencement

35

This Schedule comes into force on 6 April 2020 (“the commencement date”).

Transitional provisions

36

Where a period of account of a company begins before and ends on or after the commencement date, it is to be assumed for the purposes of the amendments made by this Schedule—

• (a) that the period (“the straddling period of account”) consists of two separate periods of account—

• (i) the first beginning with the date on which the straddling period of account begins and ending with 5th April 2020, and

• (ii) the second beginning with the commencement date and ending with the date on which the straddling period of account ends, and

• (b) that separate accounts have been drawn up for each of those separate periods in accordance with generally accepted accounting practice.

37

• (1) This paragraph applies if—

• (a) in a tax year ending before the commencement date a company makes a loss in a UK property business that is within the charge to income tax,

• (b) relief for the purposes of income tax is not given to the company for an amount of the loss (“the unrelieved amount”), and

• (c) on the commencement date the UK property business ceases to be within the charge to income tax and comes within the charge to corporation tax as a result of section 5(3A) of CTA 2009.

• (2) Relief for the purposes of corporation tax is given to the company under this paragraph for the unrelieved amount.

• (3) For this purpose—

• (a) the unrelieved amount is carried forward to post-commencement accounting periods of the company (for so long as the company continues to carry on the UK property business), and

• (b) the profits of any such accounting period that are mentioned in sub-paragraph (4) are to be reduced by the unrelieved amount (so far as that amount cannot be used under this paragraph to reduce the profits of an earlier period).

• (4) The profits are—

• (a) profits of the UK property business, and

• (b) profits arising from loan relationships or derivative contracts that the company is a party to for the purposes of that business.

• (5) In this paragraph “post-commencement accounting period” means an accounting period ending after the commencement date.

38

• (1) This paragraph applies if—

• (a) in the tax year 2019-20 a non-UK resident company is a partner in a firm which—

• (i) carries on a trade, and

• (ii) has untaxed income or relievable losses from a UK property business, and

• (b) accordingly, the company is treated under section 854 of ITTOIA 2005 as having a notional business for the tax year.

• (2) The basis period for the notional business for the tax year is taken to end with 5th April in that tax year (if it would not otherwise do so).

• (3) In this paragraph “untaxed income” has the meaning given by section 854(6) of ITTOIA 2005.

39

• (1) This paragraph applies if—

• (a) on or after the commencement date a loss arises in connection with a loan relationship of a company,

• (b) the loss is wholly or partly referable to a time before the commencement date (“the pre-commencement time”), and

• (c) had the loss arisen at the pre-commencement time it would have been brought into account in accordance with Part 3 of ITTOIA 2005 in calculating the profits of the UK property business of the company.

• (2) Section 327 (disallowance of imported losses etc) does not apply in relation to so much of the loss as is referable to the pre-commencement time.

40

• (1) This paragraph applies for an accounting period (“the loss period”) of a non-UK resident company beginning on or after the commencement date if—

• (a) apart from this paragraph, a loss arising in connection with a derivative contract of the company would by reason of this Schedule fall to be brought into account in accordance with Part 7 of CTA 2009,

• (b) the loss is wholly or partly referable to a time before the commencement date when the derivative contract was not subject to corporation tax, and

• (c) had the loss arisen at that time it would not have been brought into account in accordance with Part 3 of ITTOIA 2005 in calculating the profits of the UK property business of the company.

• (2) The amounts brought into account for the loss period in accordance with Part 7 of CTA 2009 must be such as to secure that none of the loss referable to that time is treated as arising in the loss period or any other accounting period of the company.

• (3) For the purposes of this section a loss is referable to a time when a contract is not subject to corporation tax so far as, at the time to which the loss is referable, the company would not have been chargeable to corporation tax on any profits arising from the contract.

• (4) If the company was not a party to the contract at the time to which the loss is referable, subparagraph (3) applies as if the reference to the company were a reference to the person who at that time was in the same position as respects the contract as is subsequently held by the company.

• (5) An amount which would be brought into account in accordance with Part 7 of CTA 2009 in respect of a derivative contract apart from this paragraph is treated for the purposes of section 699(1) of CTA 2009 (amounts brought into account under Part 7 excluded from being otherwise brought into account) as if it were so brought into account.

• (6) Accordingly, that amount must not be brought into account for corporation tax purposes as respects the derivative contract either in accordance with Part 7 of CTA 2009 or otherwise.

• (7) Section 607ZA of CTA 2009 (debits referable to times before UK property business carried on) has effect subject to this paragraph.

41

• (1) This paragraph applies for an accounting period (“the relevant period”) of a non-UK resident company beginning on or after the commencement date if—

• (a) a profit arising in connection with a loan relationship or derivative contract of the company (“the first instrument”) falls by reason of this Schedule to be brought into account in the relevant period in accordance with Part 5 or Part 7 of CTA 2009,

• (b) an amount of the profit (“the profit amount”) is referable to a time before the commencement date when the first instrument was not subject to corporation tax,

• (c) had the profit arisen at that time it would not have been brought into account in accordance with Part 3 of ITTOIA 2005 in calculating the profits of the UK property business of the company,

• (d) at that time the first instrument and another loan relationship or derivative contract (“the second instrument”) were in a hedging relationship with one another, and

• (e) an amount of a loss (“the loss amount”) arising in connection with the second instrument would (apart from this paragraph) be prevented by reason of paragraph 40 or section 327 of CTA 2009 from being brought into account in the relevant period accordance with Part 5 or Part 7 of CTA 2009.

• (2) So much of the loss amount as does not exceed the profit amount may be brought into account in the relevant period in accordance with Part 5 or Part 7 of CTA 2009.

• (3) For the purposes of sub-paragraph (1) the first instrument and the second instrument are in a hedging relationship with one another in so far as one of them is intended to act as a hedge of the company's exposure to changes in the fair value of the other.

• (4) In a case where the first instrument and the second instrument are in a hedging relationship with one another to a limited extent, subsection (2) has effect in relation to so much of the loss amount as is just and reasonable having regard to the extent of that hedging relationship.

• (5) For the purposes of this paragraph a profit is referable to a time when the first instrument is not subject to corporation tax so far as, at the time to which the profit is referable, the company would not have been chargeable to corporation tax on any profits arising from the instrument.

• (6) If the company was not a party to the first instrument at the time to which the profit is referable, subparagraph (5) applies as if the reference to the company were a reference to the person who at that time was in the same position as respects the instrument as is subsequently held by the company.

42

• (1) Where—

• (a) before the commencement date a company is chargeable to income tax on the profits of its UK property business,

• (b) on the commencement date the company becomes chargeable to corporation tax on the profits arising from a derivative contract that it is a party to for the purposes of its UK property business, and

• (c) there is a tax asymmetry in relation to the derivative contact,

the amounts to be brought into account in respect of the derivative contract for the purposes of Part 7 of CTA 2009 are to be adjusted in such manner as is just and reasonable having regard to the tax asymmetry.

• (2) For the purposes of subparagraph (1) there is a tax asymmetry in relation to the derivative contract if—

• (a) fair value amounts arising in relation to the derivative contract are brought into account in calculating for the purposes of income tax the profits or losses of the company's UK property business for tax years ending before the commencement date, but

• (b) by reason of regulation 9 of the Disregard Regulations, fair value amounts arising in relation to the contract are not brought into account for the purposes of Part 7 of CTA 2009 for accounting periods of the company beginning on or after the commencement date.

• (3) In this paragraph—

• “fair value amount” means an amount representing a change in the fair value of a derivative contract which is recognised in determining a company's profit or loss for a period of account in accordance with generally accepted accounting practice;

• “the Disregard Regulations” means the Loan Relationships and Derivative Contracts (Disregard and Bringing into Account of Profits and Losses) Regulations 2004 (S.I. 2004/3256).

43

• (1) This paragraph applies if—

• (a) an amount representing a change in the fair value of a derivative contract is recognised in determining a company's profit or loss for a period of account beginning before the commencement date, and

• (b) the amount would have been brought into account in calculating for the purposes of income tax the profits or losses of the company's UK property business for a tax year ending before the commencement date but for its having been treated as an amount of a capital nature.

• (2) In determining the amounts the company is to bring into account for the purposes of Part 7 of CTA 2009 for an accounting period beginning on or after the commencement date—

• (a) the derivative contract is to be treated as being one in relation to which an election has effect under regulation 6A of the Disregard Regulations, and

• (b) if regulation 7 or 8 of those Regulations applies in relation to the derivative contract, the amount referred to in subparagraph (1) is to be treated for the purposes of regulation 10 of those Regulations as being an amount that has previously been excluded from being brought into account for the purposes of Part 7 of CTA 2009 by regulation 7 or 8 (as the case may be).

• (3) In this paragraph—

• “the Disregard Regulations” means the Loan Relationships and Derivative Contracts (Disregard and Bringing into Account of Profits and Losses) Regulations 2004 (S.I. 2004/3256);

• “recognised” means recognised in accordance with generally accepted accounting practice.

44

• (1) This paragraph applies if—

• (a) before 1 January 2015 a company measures a relevant derivative contract at fair value,

• (b) on the commencement date the company comes within the charge to corporation tax by reason of this Schedule, and

• (c) the first relevant period of the company begins on or after the commencement date.

• (2) The company is to be treated for the purposes of regulation 6A of the Disregard Regulations as if it was a new adopter.

• (3) In this paragraph—

• “the Disregard Regulations” means the Loan Relationships and Derivative Contracts (Disregard and Bringing into Account of Profits and Losses) Regulations 2004 (S.I. 2004/3256), and

• “the first relevant period” and “relevant derivative contract” have the meaning given by regulation 6A(5) of the Disregard Regulations.

• (4) In determining for the purposes of this paragraph whether, on the commencement date, a company comes within the charge to corporation tax by reason of this Schedule, no account is to be taken of any disposal made by the company before that date where any gain accruing to the company on the disposal would be chargeable to corporation tax as a result of section 2B(4) of TCGA 1992.

45

• (1) This paragraph applies if on the commencement date—

• (a) an asset held by a non-UK resident company for the purposes of its UK property business becomes a chargeable intangible asset in relation to the company by reason of the business coming within the charge to corporation tax, or

• (b) an asset held by a non-UK resident company for the purposes of enabling it to generate other UK property income becomes a chargeable intangible asset in relation to the company by reason of that income coming within the charge to corporation tax.

• (2) Part 8 of CTA 2009 applies as if—

• (a) the company had acquired the asset immediately on the commencement date, and

• (b) had done so for its accounting value at that time.

• (3) In this paragraph—

• “accounting value” and “chargeable intangible asset” have the meaning they have in Part 8 of CTA 2009, and

• “other UK property income” has the meaning it has in Part 2 of CTA 2009.

46

• (1) An election under section 792 of CTA 2009 (reallocation of degrouping charge within a group) may not be made if—

• (a) subsection (3A) of section 793 applies to B, and

• (b) the relevant time is before 5 July 2016.

• (2) An election under section 792 of CTA 2009 may not be made if—

• (a) subsection (3B) of section 793 applies to B, and

• (b) the relevant time is before the commencement date.

• (3) In this paragraph references to “B” and “the relevant time” must be read in accordance with section 792 of CTA 2009.

47

• (1) This paragraph applies if—

• (a) before the commencement date a company incurs expenditure for the purposes of a UK property business it is about to carry on,

• (b) the company begins to carry on the business on or after the commencement date, and

• (c) when the company begins to carry on the business it is non-UK resident.

• (2) Subsection (7) of section 1147 of CTA 2009 (which enables a company to obtain relief for expenditure on contaminated or derelict land incurred prior to carrying on a UK property business) does not apply in relation to the expenditure.

48

Where on the commencement date—

• (a) a non-UK resident company ceases to be within the charge to income tax and comes within the charge to corporation tax by reason of this Schedule, and

• (b) an accounting period of the company begins in accordance with section 9(1)(a) of CTA 2009,

the Corporation Tax (Instalment Payments) Regulations 1998 (S.I. 1998/3175) do not have effect in relation to that accounting period.

49

• (1) This paragraph applies if on or after 29 October 2018 a company enters into an arrangement the main purpose or one of the main purposes of which is to secure for any person a tax advantage related to the coming into force of this Schedule.

• (2) The tax advantage is to be counteracted by means of adjustments.

• (3) The adjustments may be made (whether by an officer of Revenue and Customs or the person who would obtain the tax advantage) by way of an assessment, the modification of an assessment, an amendment or disallowance of a claim, or otherwise.

• (4) In this paragraph—

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

• “tax advantage” has the meaning given by section 1139 of CTA 2010.

50

• (1) This paragraph applies if—

• (a) a company enters into an arrangement of a kind mentioned in paragraph 49(1),

• (b) the arrangements are effected by taking only ordinary commercial steps in accordance with a generally prevailing commercial practice,

• (c) the tax advantage that the arrangements secure is the benefit of a relief expressly conferred by Part 10 of TIOPA 2010 (corporate interest restriction), and

• (d) securing that tax advantage is wholly consistent with the policy objectives of that Part.

• (2) If the arrangement is entered into on or after 29 October 2018, the tax advantage is not to be counteracted by means of adjustments under paragraph 49.

• (3) In addition, the tax advantage is not to be counteracted by means of adjustments under section 461 of TIOPA 2010 irrespective of the date on which the arrangement was entered into.

SCHEDULE 6

Introduction

1

Part 3 of FA 2015 (diverted profits tax) is amended as follows.

Calculation of taxable diverted profits

2

• (1) Section 82 (calculation of taxable diverted profits in section 80 or 81 case: introduction) is amended as follows.

• (2) In subsection (3) for “(9)” substitute “ (10) ”.

• (3) In subsection (7) (when the “actual provision condition” is met) in paragraph (a) omit “(ignoring Part 4 of TIOPA 2010 (transfer pricing))”.

• (4) After subsection (7) insert—

(7A) For the purposes of subsection (7)(a) ignore any adjustment that is required to be made to the results of the material provision under Part 4 of TIOPA 2010 (transfer pricing).

• (5) After subsection (9) insert—

(10) “Diverted profits” of the relevant company for the accounting period means an amount— (a) in respect of which the company is chargeable to corporation tax for that period by reason of any adjustment required to be made to the results of the material provision under Part 4 of TIOPA 2010 (transfer pricing), and (b) which, in a case where section 81 applies, is attributable (in accordance with sections 20 to 32 of CTA 2009) to UKPE”.

3

In section 83 (section 80 or 81 cases where no taxable diverted profits arise) omit subsection (2).

4

In section 84 (section 80 or 81: calculation of profits by reference to the actual provision) in subsection (2) for the words from “the amount (if any)” to the end substitute “ an amount equal to so much of the diverted profits of the company for the accounting period as are not taken into account in an assessment to corporation tax included before the end of the review period in the company's company tax return for that accounting period. ”

5

• (1) Section 85 (section 80 or 81: calculation of profits by reference to the relevant alternative provision) is amended as follows.

• (2) In subsection (4) for paragraph (a) (but not the “and” immediately after it) substitute—

(a) so much of the diverted profits (if any) of the company for the accounting period as are not taken into account in an assessment to corporation tax included before the end of the review period in the company's company tax return for that accounting period,

.

• (3) In subsection (6) (meaning of “the notional additional amount”)—

• (a) in the words before paragraph (a) omit “the amount by which”,

• (b) in paragraph (a) before “amount” insert “ additional ”,

• (c) at the end of paragraph (a) for “exceeds” substitute “ less ”, and

• (d) in paragraph (b)(i) for the words from “the application” to the end substitute “ any adjustment required to be made to the results of the material provision (whether under Part 4 of TIOPA 2010 (transfer pricing) or otherwise), ”.

• (4) After subsection (6) insert—

(7) In calculating the additional amount mentioned in paragraph (a) of subsection (6) no account is to be taken of any adjustment required to be made to the results of the material provision under Part 4 of TIOPA 2010 or otherwise.

6

• (1) Section 88 (calculation of taxable diverted profits in section 86 case: introduction) is amended as follows.

• (2) After subsection (5A) insert—

(5B) In calculating the notional PE profits no account is to be taken of any adjustment within subsection (5C). (5C) An adjustment is within this subsection if— (a) it is an adjustment required to be made under Part 4 of TIOPA 2010 to the results of any provision made or imposed between the foreign company and the avoided PE, (b) it is taken into account in an assessment to corporation tax included in a company tax return of the avoided PE, and (c) the time when it is first taken into account as mentioned in paragraph (b) is after the end of the review period.

• (3) In subsection (9)(a) omit “(ignoring Part 4 of TIOPA 2010 (transfer pricing)”.

• (4) After subsection (9) insert—

(9A) For the purposes of subsection (9)(a) ignore any adjustment that would be required to be made to the results of the material provision under Part 4 of TIOPA 2010 in calculating what would have been the notional PE profits for the accounting period.

7

After section 111 insert—

(111A) A reference in section 82 or 88 to an adjustment required to be made under Part 4 of TIOPA 2010 (transfer pricing) to the results of any provision includes a reference to an adjustment required to be made under any other enactment to the results of the provision if and to the extent that, but for that other enactment, the adjustment would have been required to be made under that Part.

8

The amendments made by paragraphs 2 to 7 have effect in relation to accounting periods beginning on or after 29 October 2018.

Extension of period for issuing a preliminary notice

9

• (1) Section 93 (preliminary notice) is amended as follows.

• (2) In subsection (5) (period for issuing a notice) for the words from “, a preliminary notice” to the end substitute

— (a) a preliminary notice may not be issued in respect of an accounting period on the basis that section 80 or 81 applies more than six months after the last day on which an amendment of the company tax return for the accounting period could be made, and (b) a preliminary notice may not be issued in respect of an accounting period on the basis that section 86 applies more than 24 months after the end of that accounting period.

• (3) After subsection (5) insert—

(5A) For the purposes of subsection (5)(a) no account is to be taken of any exception to paragraph 15(4) of Schedule 18 to FA 1998 (period for amending a company tax return).

• (4) The amendments made by this paragraph do not have effect in relation to a preliminary notice if the period during which it may be issued (but for the amendments) expires before this Act is passed.

Relief from corporation tax

10

• (1) After section 100 insert—

(100A) (1) This section applies where a charging notice or supplementary charging notice is issued to a company for an accounting period and any of the following events occurs— (a) the period of 30 days mentioned in subsection (2) of section 102 ends without notice of an appeal against the notice being given in accordance with that subsection, (b) an appeal against the notice is finally determined otherwise than by the notice being cancelled, or (c) an appeal against the notice is withdrawn. (2) The company is not chargeable to corporation tax for the accounting period in respect of any amount within subsection (3). (3) An amount is within this subsection if— (a) the company failed before the end of the review period to take the amount into account in an assessment to corporation tax included in the company tax return for the accounting period, and (b) that failure gave rise to, or to any of, the taxable diverted profits in respect of which the notice imposes a charge to diverted profits tax.

• (2) The amendment made by this paragraph has effect in relation to accounting periods beginning on or after 1 April 2015.

Extension of the review period

11

• (1) In section 101 (HMRC review of charging notice)—

• (a) in subsection (2) (meaning of “review period”) for “12 months” substitute “ 15 months ”, and

• (b) in subsection (13) (events that bring the review period to an end early) for “12 months” substitute “ 15 months ”.

• (2) The amendments made by this paragraph do not have effect in relation to a review period that, but for the amendments, expires before 29 October 2018.

Extension of period for amendment of company tax return

12

After section 101 insert—

(101A) (1) This section applies where a charging notice is issued to a company by reason of section 80 or 81 applying in relation to it for an accounting period. (2) At any time during the first 12 months of the review period, the company may amend its company tax return for the accounting period so as to reduce the taxable diverted profits arising to it in the accounting period. (101B) (1) This section applies where a charging notice is issued to a company (“the foreign company”) by reason of section 86 applying in relation to it for an accounting period. (2) At any time during the first 12 months of the review period, the avoided PE may amend a company tax return made by it so as to reduce the taxable diverted profits arising to the foreign company in the accounting period.

SCHEDULE 7

CGT exit charge payment plans

1

In TMA 1970, after section 59BA insert—

(59BB) Schedule 3ZAA contains provision for the payment in instalments of capital gains tax to which liability arises by virtue of section 25 or 80 of the 1992 Act.

2

After Schedule 3ZA to TMA 1970 insert—

SCHEDULE 3ZAA (1) (1) This Schedule makes provision for certain persons who are liable to pay an exit charge under section 25 or 80 of the 1992 Act to agree with HMRC to pay the charge in instalments. (2) An agreement under this Schedule is called a “CGT exit charge payment plan”. (2) (1) This paragraph applies where a person resident in an EEA state outside the United Kingdom is liable to pay an exit charge for a tax year by virtue of section 25(1) or (3) of the 1992 Act (deemed disposals by non-residents). (2) The person is eligible to enter into a CGT exit charge payment plan in relation to any one or more of the assets to which the exit charge relates if— (a) at the time of the event giving rise to the exit charge, the person had a right to freedom of establishment, or (b) at any time after that event, the person carries on a trade in an EEA state other than the United Kingdom through a branch or agency and the asset or assets is or are— (i) used in or for the purposes of that trade, or (ii) used or held for the purposes of the branch or agency. (3) (1) This paragraph applies where the relevant trustees of a settlement are liable to pay an exit charge for a tax year by virtue of section 80 of the 1992 Act (charge on ceasing to be resident in the UK). (2) The relevant trustees are eligible to enter into a CGT exit charge payment plan in relation to any one or more of the assets to which the exit charge relates if— (a) at the time the trustees of the settlement ceased to be resident in the United Kingdom for the purposes of that section, they had a right to freedom of establishment, (b) immediately before that time, the trustees of the settlement used the asset or assets for an economically significant activity carried on in the United Kingdom, and (c) immediately after that time, those trustees— (i) become resident in another EEA state for the purposes of the 1992 Act, and (ii) use the asset or assets for an economically significant activity carried on there. (4) (1) A CGT exit charge payment plan may relate to— (a) the whole of the exit charge attributable to the asset or assets to which the plan relates (the “deferrable exit charge”), or (b) only part of the deferrable exit charge. (2) In this Schedule— - “deferred exit charge” means the amount of the exit charge to which a plan relates; - “taxpayer”, in relation to a plan, means the person eligible under paragraph 2 or 3 to enter into the plan. (3) For the purposes of this Schedule the exit charge attributable to an asset is such proportion of the exit charge as any gain accruing to the taxpayer in respect of the asset by virtue of section 25(1) or (3) or 80 of the 1992 Act in the tax year bears to the total gains to which the exit charge relates. (5) A CGT exit charge payment plan must provide for the deferred exit charge to be payable in 6 equal instalments where— (a) the 1st instalment is due on the day on which payment of the exit charge is (apart from the plan) due and payable under section 59B, and (b) the other 5 instalments are due one on each of the first 5 anniversaries of that day. (6) (1) To enter into a CGT exit charge payment plan, the taxpayer must apply to HMRC. (2) An application for a CGT exit charge payment plan must— (a) be made on or before the date specified in section 59B as the date by which the exit charge is payable, and (b) contain details of all the matters which are required by this Schedule to be specified in the plan. (3) A CGT exit charge payment plan is entered into when— (a) the taxpayer agrees to pay the deferred exit charge, and any interest on it, in accordance with the plan, and (b) an officer of Revenue and Customs agrees to accept payment of the deferred exit charge in accordance with the plan. (4) A CGT exit charge payment plan is void if— (a) an event giving rise to the exit charge is part of arrangements the main purpose of which, or one of the main purposes of which, is to defer the payment by the taxpayer of the exit charge, or (b) any information furnished by the taxpayer in connection with the plan does not fully and accurately disclose all facts and considerations material to the decision of the officer of Revenue and Customs to accept payment in accordance with the plan. (7) (1) If the taxpayer is eligible under paragraph 2, a CGT exit charge payment plan must specify— (a) the EEA state in which the person entering into the plan is resident, and (b) if the person has ceased to carry on a trade in the United Kingdom through a branch or agency there, the date on which the person ceased to do so. (2) If the taxpayer is eligible under paragraph 3, a CGT exit charge payment plan must specify— (a) the date on which the trustees of the settlement became not resident in the United Kingdom for the purposes of section 80 of the 1992 Act, and (b) the EEA state in which those trustees became resident. (3) A CGT exit charge payment plan must specify— (a) the amount of the exit charge which, in the taxpayer's opinion, the taxpayer is liable to pay under section 25 or (as the case may be) section 80 of the 1992 Act in respect of the tax year, and (b) the amount of the deferred exit charge. (4) A CGT exit charge payment plan may contain appropriate provision regarding security for HMRC if an officer of Revenue and Customs considers that there would be a serious risk to collection of any amount of deferred exit charge without it. (8) (1) This paragraph applies where a CGT exit charge payment plan is entered into by the taxpayer. (2) The deferred exit charge remains due and payable under section 59B (payment of income tax and capital gains tax: assessments other than simple assessments). (3) However, the Commissioners for Her Majesty's Revenue and Customs— (a) may not seek payment of any of the deferred exit charge otherwise than in accordance with the plan, and (b) may make repayments in respect of any of the deferred exit charge paid, or any amount paid on account of the deferred exit charge, before the plan is entered into. (4) The deferred exit charge carries interest in accordance with Part 9 as if the plan had not been entered into; and each time a payment is made under the plan, it is to be paid together with any interest payable on it. (5) The taxpayer is liable to penalties for late payment of the deferred exit charge only if the taxpayer fails to make payments in accordance with the plan (see item 3C of the Table at the end of paragraph 1 of Schedule 56 to the Finance Act 2009). (6) Any of the deferred exit charge which is for the time being unpaid may be paid at any time before it becomes payable under the plan together with interest payable on it to the date of payment. (7) If— (a) the taxpayer becomes bankrupt under the law of England and Wales or Northern Ireland or the taxpayer's estate is sequestrated under the law of Scotland, (b) an event corresponding to an event in paragraph (a) occurs under the law of an EEA state outside the United Kingdom, or (c) the taxpayer becomes resident in a country or territory that is not an EEA state, the outstanding balance of the deferred exit charge is payable on the date on which the next instalment would otherwise have been due under the plan. (9) If, for the purposes of any double taxation arrangements, a person is treated at any time as resident in a territory other than an EEA state, the person is also to be treated as resident there at that time for the purposes of this Schedule. (10) In this Schedule— - “deferrable exit charge” has the meaning given by paragraph 4(1)(a); - “deferred exit charge” has the meaning given by paragraph 4(2); - “double taxation arrangements” means arrangements made by two or more territories with a view to affording relief from double taxation; - “economically significant activity” has the meaning given by section 13A(4) of the 1992 Act (reading references to a company as references to trustees); - “exit charge” means— 1. for the purposes of paragraph 2, any amount of capital gains tax which a person is liable to pay for a tax year which the person would not be liable to pay if gains arising by virtue of section 25 of the 1992 Act in the tax year were ignored; 2. for the purposes of paragraph 3, any amount of capital gains tax which the relevant trustees are liable to pay for a tax year which they would not be liable to pay if gains arising by virtue of section 80 of the 1992 Act in the tax year were ignored; - “right to freedom of establishment” means a right protected by— 1. Article 49 of the Treaty on the Functioning of the European Union, or 2. Article 31 of the EEA agreement; - “taxpayer” has the meaning given by paragraph 4(2); - “trade” includes a profession or vocation.

Penalties

3

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

• (2) In the Table at the end of paragraph 1, after entry 3B insert—

3C	Capital gains tax	Amount payable under a CGT exit charge payment plan entered into in accordance with Schedule 3ZAA to TMA 1970	The later of—the date falling 30 days after the date specified in section 59B of TMA 1970 as the date by which the amount is due to be paid, andthe date on which the amount is payable under the plan.

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

4

In section 107A of TMA 1970 (relevant trustees), in subsection (3)(c)(i), after “1,” insert “ 3C, ”.

5

In paragraph 5(3) of Schedule 11 to F(No.3)A 2010 (penalties for failure to make payments on time), omit “items 1, 3” in both places.

CT exit charge payment plans

6

• (1) In sections 59FA, 109B and 109E of and Schedule 3ZB to TMA 1970 (including any headings of, and in, those provisions)—

• (a) for “an exit charge payment plan”, in each case it occurs, substitute “ a CT exit charge payment plan ”,

• (b) for “exit charge payment plan”, in each case where it occurs without “an” before it, substitute “ CT exit charge payment plan ” (but this does not apply to paragraph 10(2A) or 11(1) of Schedule 3ZB to TMA 1970 as respectively inserted and substituted by Schedule 8 to this Act), and

• (c) for “exit charge payment plans” in each case it occurs, substitute “ CT exit charge payment plans ”.

• (2) In Schedule 56 to FA 2009 (penalties), in the Table at the end of paragraph 1, in entry 6ZA, in the third column, for “an exit charge payment plan” substitute “ a CT exit charge payment plan ”.

Commencement

7

The amendments made by paragraphs 1 and 2 have effect in relation to amounts of capital gains tax which a person is liable to pay by virtue of section 25(1) or (3) or 80 of TCGA 1992 in relation to events occurring on or after 6 April 2019.

SCHEDULE 8

PART 1 — CT exit charge payment plans

1

Schedule 3ZB to TMA 1970 (CT exit charge payment plans) is amended as follows.

2

In paragraph 1 (circumstances in which plan may be entered into: company ceasing to be resident in UK)—

• (a) in subparagraph (1)(b) for “another” substitute “ a relevant ”,

• (b) in subparagraph (5) for “an” substitute “ a relevant ”,

• (c) in subparagraph (6) for “other” substitute “ relevant ”, and

• (d) in subparagraph (7) at the end insert

; “relevant EEA state” means an EEA state that is— (a) a member of the European Union, or (b) a party to an agreement with the United Kingdom that provides for mutual assistance equivalent to that provided for by Council Directive 2010/24/EU of 16 March 2010 concerning mutual assistance for the recovery of claims relating to taxes.

3

• (1) Paragraph 4 (circumstances in which plan may be entered into: non-UK resident companies with UK permanent establishments) is amended as follows.

• (2) In subparagraph (4) (meaning of “PE qualifying event”)—

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

• (b) after paragraph (c) insert

, and (d) immediately after the event— (i) the asset or liability is held or owed by the company for the purposes of a permanent establishment of the company in a relevant EEA state, or (ii) the asset or liability is held or owed by the company otherwise than for the purposes of a permanent establishment of the company and the company is resident in a relevant EEA state.

• (3) In subparagraph (6)—

• (a) for “and” substitute “ , ”, and

• (b) after “ “eligible company”” insert “ and “relevant EEA state” ”.

4

In paragraph 8(1) (entering into a plan)—

• (a) in paragraph (a) for the words from “the standard” to the end substitute “ paragraphs 11 to 14 ”, and

• (b) in paragraph (c) for “paragraphs 10 to 12” substitute “ paragraph 10 ”.

5

• (1) Paragraph 10 (contents of plan) is amended as follows.

• (2) In subparagraph (1)(b) before “EEA state” insert “ relevant ”.

• (3) After subparagraph (2) insert—

(2A) In either case a CT exit charge payment plan entered into by a company must specify requirements as to the ongoing provision of information by the company to Her Majesty's Revenue and Customs in relation to the exit charge assets and liabilities.

• (4) In subparagraph (3) for paragraph (c) substitute—

(c) the amount of ECPP tax attributable to each exit charge asset or liability.

• (5) Omit subparagraphs (4) and (5).

6

For paragraphs 11 to 17, and the italic heading before those paragraphs, substitute—

(11) (1) Where a CT exit charge payment plan is entered into the ECPP tax is due in 6 instalments of equal amounts as follows— (a) the first instalment is due on the first day after the period of 9 months beginning immediately after the end of the migration accounting period, and (b) the other 5 instalments are due one on each of the first 5 anniversaries of that day. (2) But see paragraphs 12, 13 and 14 for circumstances in which all or part of the outstanding balance of the ECPP tax becomes due otherwise than by those instalments. (12) (1) Where an event mentioned in subparagraph (2) occurs, the outstanding balance of the ECPP tax is due on the date on which the next instalment of that tax would otherwise have been due. (2) The events are— (a) the company becoming insolvent or entering administration, (b) the appointment of a liquidator, (c) an event under the law of a country or territory outside the United Kingdom corresponding to an event specified in paragraph (a) or (b), (d) the company ceasing to be resident in a relevant EEA state and, on so ceasing, not becoming resident in another relevant EEA state, or (e) the company failing to pay any amount of the ECPP tax for a period of 12 months after the date on which the amount becomes due. (13) (1) This paragraph applies where— (a) a trigger event occurs in relation to an exit charge asset or liability during the instalments period, and (b) a trigger event has not previously occurred in relation to that asset or liability during that period. (2) A trigger event occurs in relation to a TCGA or trading stock exit charge asset or an intangible exit charge asset if the company— (a) disposes of the asset, or (b) ceases to hold the asset for the purposes of a business carried on by the company in a relevant EEA state and, on so ceasing, does not begin to hold it for the purposes of another such business. (3) A trigger event occurs in relation to a financial exit charge asset or liability if the company— (a) ceases to be a party to the loan relationship or derivative contract in question, or (b) ceases to be a party to the loan relationship or derivative contract in question for the purposes of a business carried on by the company in a relevant EEA state and, on so ceasing, does not begin to be a party to it for the purposes of another such business. (4) On the occurrence of the trigger event an amount of the ECPP tax is due. (5) The amount due is— $$( A − B ) × O T$Where—“A” is the amount of ECPP tax attributable to the exit charge asset or liability (see paragraph 10(6)),“B” is the amount of ECPP tax that has previously become due under paragraph 14 by reason of a partial trigger event occurring in relation to the exit charge asset or liability,“O” is the amount of ECPP tax that is outstanding at the time of the trigger event, and“T” is the amount of ECPP tax.$ (6) In this paragraph and paragraph 14 “the instalments period” means the period— (a) beginning immediately after— (i) the company ceases to be resident in the United Kingdom (in the case of a Part 1 company), or (ii) the occurrence of the PE qualifying event in respects of the asset or liability concerned (in the case of a Part 2 company), and (b) ending with the day on which the final instalment of the ECPP tax is due under paragraph 11. (14) (1) This paragraph applies if— (a) a partial trigger event occurs in relation to an exit charge asset or liability during the instalments period, and (b) a trigger event has not previously occurred in relation to that asset or liability during that period. (2) A partial trigger event occurs in relation to a TCGA or trading stock exit charge asset if the company disposes of part (but not all) of the asset. (3) A partial trigger event occurs in relation to a financial exit charge asset or liability if there is a disposal of a right or liability under the loan relationship or derivative contract in question which amounts to a related transaction (as defined in section 304 or 596 of CTA 2009 as the case may be). (4) A partial trigger event occurs in relation to an intangible exit charge asset if there is a transaction which results in a reduction in the accounting value of the asset but not in the asset ceasing to be recognised in the company's balance sheet. (5) On the occurrence of the partial trigger event an amount of the outstanding ECPP tax is due. (6) The amount due is the amount that is just and reasonable having regard to the amount that would have been due had a trigger event occurred in relation to the exit charge asset or liability instead. (7) In this paragraph “trigger event” has the same meaning as in paragraph 13.

7

In Schedule 56 to FA 2009 (penalty for failure to make payments on time) in paragraph 4 (amount of penalty in respect of certain late payments) in subparagraph (1) for “item 5, 6 or 6ZZA” substitute “ any of items 5 to 6ZA ”.

8

The amendments made by paragraphs 1 to 6 have effect in relation to accounting periods ending on or after 1 January 2020.

PART 2 — Repeal of certain postponement provisions

9

• (1) Section 187 of TCGA 1992 (postponement of charge on deemed disposal under section 185) is repealed.

• (2) The following amendments have effect in consequence of that repeal.

• (3) In section 185(1) of TCGA 1992 (deemed disposal of assets on company ceasing to be resident in UK) for “and section 187 apply” substitute “ applies ”.

• (4) In Schedule 3ZB to TMA 1970 (CT exit charge payment plans)—

• (a) in paragraph 2(3) (meaning of “exit charge provisions” in Part 1) omit paragraph (b), and

• (b) in paragraph 3 (interpretation: exit charge assets and liabilities)—

• (i) in subparagraph (2)(a) omit “, (b)”, and

• (ii) in subparagraph (2)(c)(ii) omit “or (b)”.

• (5) The amendments made by this paragraph have effect in relation to a company in a case where section 185 of TCGA 1992 applies to the company by reason of its ceasing to be resident in the United Kingdom on or after 1 January 2020.

10

• (1) Sections 860 to 862 of CTA 2009 (postponement of gain on deemed realisation under section 859) are repealed.

• (2) The following amendments have effect in consequence of that repeal.

• (3) In section 859 of CTA 2009 (asset ceasing to be chargeable intangible asset: deemed realisation at market value) omit subsection (3).

• (4) In Schedule 3ZB to TMA 1970 (CT exit charge payment plans)—

• (a) in paragraph 2(3) (meaning of “exit charge provisions” in Part 1)—

• (i) at the end of paragraph (e) insert “ and ”, and

• (ii) omit paragraph (g) and the “and” immediately before it, and

• (b) in paragraph 3 (interpretation: exit charge assets and liabilities) in subparagraph (2)(c)(i) omit “or (g)”.

• (5) The amendments made by this paragraph have effect in relation to a company in a case where section 859 of CTA 2009 applies to the company by reason of its ceasing to be resident in the United Kingdom on or after 1 January 2020.

PART 3 — Treatment of assets subject to EU exit charges

11

• (1) After section 184I of TCGA 1992 insert—

(184J) (1) This section applies if— (a) an asset becomes a chargeable asset in relation to a company by reason of an event specified in subsection (2), and (b) on the occurrence of that event the company becomes subject to an EU exit charge in relation to the asset. (2) The events are— (a) the company becoming resident in the United Kingdom, and (b) in the case of a company that is not resident in the United Kingdom, the asset beginning to be held for the purposes of a trade carried on by the company in the United Kingdom through a permanent establishment. (3) The company is to be treated for the purposes of this Act as if it had acquired the asset for its market value at the time it became a chargeable asset in relation to the company. (4) For the purposes of this section an asset is a “chargeable asset” in relation to a company at any time if any gain on its disposal by the company at that time would be chargeable to corporation tax. (5) “EU exit charge” means a charge to tax under the law of a member State in accordance with Article 5(1) of Directive (EU) 2016/1164 of the European Parliament and of the Council of 12 July 2016 laying down rules against tax avoidance practices that directly affect the functioning of the internal market.

• (2) The amendment made by this paragraph has effect in relation to assets that become chargeable assets on or after 1 January 2020.

12

• (1) Part 8 of CTA 2009 (intangible fixed assets) is amended as follows.

• (2) In section 863 (asset becoming chargeable intangible asset) after subsection (2) insert—

(3) But subsection (2)(b) is subject to section 863A.

• (3) After section 863 insert—

(863A) (1) This section applies if— (a) an asset becomes a chargeable intangible asset in relation to a company by reason of an event specified in section 863(1)(a) or (b), and (b) on the occurrence of that event the company becomes subject to an EU exit charge in respect of the asset. (2) This Part applies as if the company had acquired the asset for its market value at the time it became a chargeable intangible asset in relation to the company. (3) “EU exit charge” means a charge to tax under the law of a member State in accordance with Article 5(1) of Directive (EU) 2016/1164 of the European Parliament and of the Council of 12 July 2016 laying down rules against tax avoidance practices that directly affect the functioning of the internal market.

• (4) The amendments made by this paragraph have effect in relation to assets that become chargeable intangible assets on or after 1 January 2020.

SCHEDULE 9

1

Part 8 of CTA 2009 (intangible fixed assets) is amended as follows.

2

In section 711 (overview of Part) in subsection (8) after paragraph (f) (but before the following “and”) insert—

(fa) Chapter 15A (debits in respect of goodwill and certain other assets),

.

3

In section 715 (application of Part to goodwill) in subsection (2) for the words from “section 816A” to the end substitute “ Chapter 15A (debits in respect of goodwill and certain other assets)). ”

4

In section 746 (“non-trading credits” and “non-trading debits”) in subsection (2) for paragraph (ba) substitute—

(ba) sections 879C(3), 879I(3), 879K(5) and 879O(3)(b) (debits in respect of goodwill and certain other assets treated as non-trading debits),

.

5

Omit section 816A (restrictions on goodwill and certain other assets).

6

After section 879 insert—