Finance Act 2020

(60A) (1) For the purposes of this Chapter, a company qualifies as small for a tax year if one of the following conditions is met (but this is subject to section 60C). (2) The first condition is that the company's first financial year is not relevant to the tax year. (3) The second condition is that the small companies regime applies to the company for its last financial year that is relevant to the tax year. (4) For the purposes of this section, a financial year of a company is “relevant to” a tax year if the period for filing the company's accounts and reports for the financial year ends before the beginning of the tax year. (5) Expressions used in this section and in the Companies Act 2006 have the same meaning in this section as in that Act. (60B) (1) This section applies when determining for the purposes of section 60A(3) whether the small companies regime applies to a company for a financial year in a case where— (a) at the end of the financial year the company is jointly controlled by two or more other persons, and (b) one or more of those other persons are undertakings (“the joint venturer undertakings”). (2) If the company is a parent company, the joint venturer undertakings are to be treated as members of the group headed by the company. (3) If the company is not a parent company, the company and the joint venturer undertakings are to be treated as constituting a group of which the company is the parent company. (4) In this section the expression “jointly controlled” is to be read in accordance with those provisions of international accounting standards which relate to joint ventures. (5) Expressions used in this section and in the Companies Act 2006 have the same meaning in this section as in that Act. (60C) (1) A company does not qualify as small for a tax year by reason of the condition in section 60A(3) being met if— (a) the company is a member of a group at the end of its last financial year that is relevant to the tax year, (b) the company is not the parent undertaking of that group at the end of that financial year, and (c) the undertaking that is the parent undertaking of that group at that time does not qualify as small in relation to its last financial year that is relevant to the tax year. (2) Where the parent undertaking mentioned in subsection (1)(c) is not a company, sections 382 and 383 of the Companies Act 2006 have effect for determining whether the parent undertaking qualifies as small in relation to its last financial year that is relevant to the tax year as if references in those sections to a company and a parent company included references to an undertaking and a parent undertaking. (3) For the purposes of subsections (1)(c) and (2) a financial year of an undertaking that is not a company is “relevant to” a tax year if it ends at least 9 months before the beginning of the tax year. (4) For the purposes of this section, a financial year of a company is “relevant to” a tax year if the period for filing the company's accounts and reports for the financial year ends before the beginning of the tax year. (5) Expressions used in this section and in the Companies Act 2006 have the same meaning in this section as in that Act. (60D) (1) Sections 60A to 60C apply in relation to a relevant undertaking as they apply in relation to a company, subject to any necessary modifications. (2) In this section “relevant undertaking” means an undertaking in respect of which regulations have effect under— (a) section 15(a) of the Limited Liability Partnerships Act 2000, (b) section 1043 of the Companies Act 2006 (unregistered companies), or (c) section 1049 of the Companies Act 2006 (overseas companies). (3) Expressions used in this section and in the Companies Act 2006 have the same meaning in this section as in that Act. (60E) (1) An undertaking that is not a company or a relevant undertaking qualifies as small for a tax year if one of the following conditions is met. (2) The first condition is that the undertaking's first financial year is not relevant to the tax year. (3) The second condition is that the undertaking's turnover for its last financial year that is relevant to the tax year is not more than the amount for the time being specified in the second column of item 1 of the Table in section 382(3) of the Companies Act 2006. (4) For the purposes of this section a financial year of an undertaking is “relevant to” a tax year if it ends at least 9 months before the beginning of the tax year. (5) In this section— - “relevant undertaking” has the meaning given by section 60D, and - “turnover”, in relation to an undertaking, means the amounts derived from the provision of goods or services after the deduction of trade discounts, value added tax and any other taxes based on the amounts so derived. (6) Expressions used in this section and in the Companies Act 2006 have the same meaning in this section as in that Act. (60F) (1) For the purposes of this Chapter, a person who is not a company, relevant undertaking or other undertaking qualifies as small for a tax year if the person's turnover for the last calendar year before the tax year is not more than the amount for the time being specified in the second column of item 1 of the Table in section 382(3) of the Companies Act 2006. (2) In this section— - “company” and “undertaking” have the same meaning as in the Companies Act 2006, - “relevant undertaking” has the meaning given by section 60D, and - “turnover”, in relation to a person, means the amounts derived from the provision of goods or services after the deduction of trade discounts, value added tax and any other taxes based on the amounts so derived. (60G) (1) This section applies where— (a) it is necessary for the purposes of determining whether a person qualifies as small for a tax year (“the tax year concerned”) to first determine the person's turnover for a financial year or calendar year (“the assessment year”), and (b) at the end of the assessment year the person is connected with one or more other persons (“the connected persons”). (2) For the purposes of determining whether the person qualifies as small for the tax year concerned the person's turnover for the assessment year is to be taken to be the sum of— (a) the person's turnover for the assessment year, and (b) the relevant turnover of each of the connected persons. (3) In subsection (2)(b) “the relevant turnover” of a connected person means— (a) in a case where the connected person is a company, relevant undertaking or other undertaking, its turnover for its last financial year that is relevant to the tax year concerned, and (b) in a case where the connected person is not a company, relevant undertaking or other undertaking, the turnover of the connected person for the last calendar year ending before the tax year concerned. (4) For the purposes of subsection (3)(a)— (a) a financial year of a company or relevant undertaking is relevant to the tax year concerned if the period for filing accounts and reports for the financial year ends before the beginning of the tax year concerned, and (b) a financial year of any other undertaking is relevant to the tax year concerned if it ends more than 9 months before the beginning of the tax year concerned. (5) In a case where— (a) the person mentioned in subsection (1)(a) is a company or relevant undertaking, and (b) at the end of the assessment period the person is a member of a group, the person is to be treated for the purposes of this section as not being connected with any person that is a member of that group. (6) In this section— - “turnover”, in relation to a person, means the amounts derived from the provision of goods or services after the deduction of trade discounts, value added tax and any other taxes based on the amounts so derived, and - “relevant undertaking” has the meaning given by section 60D. (7) For provision determining whether one person is connected with another, see section 718 (connected persons). (8) Expressions used in this section and in the Companies Act 2006 have the same meaning in this section as in that Act. (60H) (1) This section applies if, in the case of an engagement that meets conditions (a) to (b) in section 49(1), the client receives from the client's agent or the worker a request to state whether in the client's opinion the client qualifies as small for a tax year specified in the request. (2) The client must provide to the person who made the request a statement as to whether in the client's opinion the client qualifies as small for the tax year specified in the request. (3) If the client fails to provide the statement by the time mentioned in subsection (4) the duty to do so is enforceable by an injunction or, in Scotland, by an order for specific performance under section 45 of the Court of Session Act 1988. (4) The time is whichever is the later of— (a) the end of the period of 45 days beginning with the date the client receives the request, and (b) the beginning of the period of 45 days ending with the start of the tax year specified in the request. (5) In this section “the client's agent” means a person with whom the client entered into a contract as part of the arrangements mentioned in paragraph (b) of section 49(1). (60I) (1) For the purposes of this Chapter, a person has a UK connection for a tax year if (and only if) immediately before the beginning of that tax year the person— (a) is resident in the United Kingdom, or (b) has a permanent establishment in the United Kingdom. (2) In this section “permanent establishment”— (a) in relation to a company, is to be read (by virtue of section 1007A of ITA 2007) in accordance with Chapter 2 of Part 24 of CTA 2010, and (b) in relation to any other person, is to be read in accordance with that Chapter but as if references in that Chapter to a company were references to that person. Interpretation

6

In section 61(1) (interpretation), in the definition of company, before “means” insert “ (except in sections 60A to 60G) ”.

PART 2 — Amendments to Chapter 10 of Part 2 of ITEPA 2003

7

Chapter 10 of Part 2 of ITEPA 2003 (workers' services provided to public sector through intermediaries) is amended as follows.

8

For the heading of the Chapter substitute “Workers' services provided through intermediaries to public authorities or medium or large clients”.

9

• (1) Section 61K (scope of Chapter) is amended as follows.

• (2) In subsection (1) for the words “to a public authority through an intermediary” substitute

through an intermediary in a case where the services are provided to a person who— (a) is a public authority, or (b) qualifies as medium or large and has a UK connection for a tax year

.

• (3) After subsection (2) insert—

(3) For the purposes of this Chapter a person qualifies as medium or large for a tax year if the person does not qualify as small for the tax year for the purposes of Chapter 8 of this Part (see sections 60A to 60G). (4) Section 60I (when a person has a UK connection for a tax year) applies for the purposes of this Chapter.

10

In section 61L (meaning of “public authority”) in subsection (1)—

• (a) after paragraph (a) insert—

(aa) a body specified in section 23(3) of the Freedom of Information Act 2000,

,

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

• (c) after paragraph (f) insert

, or (g) a company connected with any person mentioned in paragraphs (a) to (f).

11

• (1) Section 61M (engagements to which the Chapter applies) is amended as follows.

• (2) In subsection (1)—

• (a) omit paragraph (b),

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

• (c) after paragraph (c) insert—

(ca) the client— (i) is a public authority, or (ii) is a person who qualifies as medium or large and has a UK connection for one or more tax years during which the arrangements mentioned in paragraph (c) have effect, and

.

• (3) After subsection (1) insert—

(1A) But sections 61N to 61R do not apply if— (a) the client is an individual, and (b) the services are provided otherwise than for the purposes of the client's trade or business.

12

• (1) Section 61N (worker treated as receiving earnings from employment) is amended as follows.

• (2) In subsection (3)—

• (a) after “subsections (5) to (7)” insert “ and (8A) ”, and

• (b) after “61T” insert “ , 61TA ”.

• (3) For subsection (5) substitute—

(5) Unless and until the client gives a status determination statement to the worker (see section 61NA), subsections (3) and (4) have effect as if for any reference to the fee-payer there were substituted a reference to the client; but this is subject to section 61V. (5A) Subsections (6) and (7) apply, subject to sections 61T, 61TA and 61V, if— (a) the client has given a status determination statement to the worker, (b) the client is not the fee-payer, and (c) the fee-payer is not a qualifying person.

• (4) In subsection (8) (meaning of “qualifying person”) before paragraph (a) insert—

(za) has been given by the person immediately above them in the chain the status determination statement given by the client to the worker,

.

• (5) After subsection (8) insert—

(8A) If the client is not a public authority, a person is to be treated by subsection (3) as making a deemed direct payment to the worker only if the chain payment made by the person is made in a tax year for which the client qualifies as medium or large and has a UK connection.

13

After section 61N insert—

(61NA) (1) For the purposes of section 61N “status determination statement” means a statement by the client that— (a) states that the client has concluded that the condition in section 61M(1)(d) is met in the case of the engagement and explains the reasons for that conclusion, or (b) states (albeit incorrectly) that the client has concluded that the condition in section 61M(1)(d) is not met in the case of the engagement and explains the reasons for that conclusion. (2) But a statement is not a status determination statement if the client fails to take reasonable care in coming to the conclusion mentioned in it. (3) For further provisions concerning status determination statements, see section 61T (client-led status disagreement process) and section 61TA (duty for client to withdraw status determination statement if it ceases to be medium or large).

14

In section 61O(1) (conditions where intermediary is a company) for paragraph (b) substitute—

(b) it is the case that— (i) the worker has a material interest in the intermediary, (ii) the worker has received a chain payment from the intermediary, or (iii) the worker has rights which entitle, or which in any circumstances would entitle, the worker to receive a chain payment from the intermediary.

15

In section 61R (application of Income Tax Acts in relation to deemed employment) omit subsection (7).

16

For section 61T substitute—

(61T) (1) This section applies if, before the final chain payment is made in the case of an engagement to which this Chapter applies, the worker or the deemed employer makes representations to the client that the conclusion contained in a status determination statement is incorrect. (2) The client must either— (a) give a statement to the worker or (as the case may be) the deemed employer that— (i) states that the client has considered the representations and has decided that the conclusion contained in the status determination statement is correct, and (ii) states the reasons for that decision, or (b) give a new status determination statement to the worker and the deemed employer that— (i) contains a different conclusion from the conclusion contained in the previous status determination statement, (ii) states the date from which the client considers that the conclusion contained in the new status determination statement became correct, and (iii) states that the previous status determination statement is withdrawn. (3) If the client fails to comply with the duty in subsection (2) before the end of the period of 45 days beginning with the date the client receives the representations, section 61N(3) and (4) has effect from the end of that period until the duty is complied with as if for any reference to the fee-payer there were substituted a reference to the client; but this is subject to section 61V. (4) A new status determination statement given to the deemed employer under subsection (2)(b) is to be treated for the purposes of section 61N(8)(za) as having been given to the deemed employer by the person immediately above the deemed employer in the chain. (5) In this section— - “the deemed employer” means the person who, assuming one of conditions A to C in section 61N were met, would be treated as making a deemed direct payment to the worker under section 61N(3) on the making of a chain payment; - “status determination statement” has the meaning given by section 61NA. (61TA) (1) This section applies if in the case of an engagement to which this Chapter applies— (a) the client is not a public authority, (b) the client gives a status determination statement to the worker, the client's agent or both, and (c) the client does not (but for this section) qualify as medium or large for a tax year beginning after the status determination statement is given. (2) Before the beginning of the tax year the client must give a statement to the relevant person, or (as the case may be) to both of the relevant persons, stating— (a) that the client does not qualify as medium or large for the tax year, and (b) that the status determination statement is withdrawn with effect from the beginning of the tax year. (3) If the client fails to comply with that duty the following rules apply in relation to the engagement for the tax year— (a) the client is to be treated as medium or large for the tax year, and (b) section 61N(3) and (4) have effect as if for any reference to the fee-payer there were substituted a reference to the client. (4) For the purposes of subsection (2)— (a) the worker is a relevant person if the status determination statement was given to the worker, and (b) the deemed employer is a relevant person if the status determination statement was given to the client's agent. (5) In this section— - “client's agent” means a person with whom the client entered into a contract as part of the arrangements mentioned in section 61M(1)(c); - “the deemed employer” means the person who, assuming one of conditions A to C in section 61N were met, would be treated as making a deemed direct payment to the worker under section 61N(3) on the making of a chain payment; - “status determination statement” has the meaning given by section 61NA.

17

• (1) Section 61W (prevention of double charge to tax and allowance of certain deductions) is amended as follows.

• (2) In subsection (1)—

• (a) in paragraph (b) for “a public authority” substitute “ another person (“the client”) ”, and

• (b) in paragraph (d) for “that public authority” substitute “ the client ”.

• (3) In subsection (2)(b) for “public authority” substitute “ client ”.

PART 3 — Consequential and miscellaneous amendments

18

In section 61D of ITEPA 2003 (managed service companies: worker treated as receiving earnings from employment) for subsection (4A) substitute—

(4A) This section does not apply where the provision of the relevant services gives rise (directly or indirectly) to an engagement to which Chapter 10 applies and either— (a) the client for the purposes of section 61M(1) is a public authority, or (b) the client for the purposes of section 61M(1)— (i) qualifies as medium or large for the tax year in which the payment or benefit mentioned in subsection (1)(b) is received, and (ii) has a UK connection for the tax year in which the payment or benefit mentioned in subsection (1)(b) is received. (4B) Sections 60I (when a person has a UK connection for a tax year), 61K(3) (when a person qualifies as medium or large for a tax year) and 61L (meaning of public authority) apply for the purposes of subsection (4A). (4C) It does not matter for the purposes of subsection (4A) whether the client for the purposes of this Chapter is also “the client” for the purposes of section 61M(1).

19

After section 688A of ITEPA 2003 insert—

(688AA) (1) PAYE Regulations may make provision for, or in connection with, the recovery of a deemed employer PAYE debt from a relevant person. (2) “A deemed employer PAYE debt” means an amount— (a) that a person (“the deemed employer”) is liable to pay under PAYE regulations in consequence of being treated under section 61N(3) as having made a deemed direct payment to a worker, and (b) that an officer of Revenue and Customs considers there is no realistic prospect of recovering from the deemed employer within a reasonable period. (3) “Relevant person”, in relation to a deemed employer PAYE debt, means a person who is not the deemed employer and who— (a) is the highest person in the chain identified under section 61N(1) in determining that the deemed employer is to be treated as having made the deemed direct payment, or (b) is the second highest person in that chain and is a qualifying person (within the meaning given by section 61N(8)) at the time the deemed employer is treated as having made that deemed direct payment.

20

In section 60 of FA 2004 (construction industry scheme: meaning of contract payments) after subsection (3) insert—

(3A) This exception applies in so far as— (a) the payment can reasonably be taken to be for the services of an individual, and (b) the provision of those services gives rise to an engagement to which Chapter 10 of Part 2 of ITEPA 2003 applies (workers' services provided through intermediaries to public authorities or medium or large clients). (3B) But the exception in subsection (3A) does not apply if, in the case of the engagement mentioned in paragraph (b) of that subsection, the client for the purposes of section 61M(1) of ITEPA 2003— (a) is not a public authority, and (b) either— (i) does not qualify as medium or large for the tax year in which the payment concerned is made, or (ii) does not have a UK connection for the tax year in which the payment concerned is made. (3C) Sections 60I (when a person has a UK connection for a tax year), 61K(3) (when a person qualifies as medium or large for a tax year) and 61L (meaning of public authority) of ITEPA 2003 apply for the purposes of subsection (3B).

21

For the italic heading before section 141A of CTA 2009 substitute “ Worker's services provided through intermediary to public authority or medium or large client ”.

22

In the heading of section 141A of CTA 2009 for “public sector” substitute “ public authority or medium or large client ”.

23

• (1) Part 13 of CTA 2009 (additional relief for expenditure on research and development) is amended as follows.

• (2) In section 1129 (qualifying expenditure on externally provided workers: connected persons) after subsection (4) insert—

(4A) In subsection (2) the reference to the staff provision payment is to that payment before any deduction is made from the payment under— (a) section 61S of ITEPA 2003, (b) regulation 19 of the Social Security Contributions (Intermediaries) Regulations 2000, or (c) regulation 19 of the Social Security Contributions (Intermediaries) (Northern Ireland) Regulations 2000.

• (3) In section 1131 (qualifying expenditure on externally provided workers: other cases) after subsection (2) insert—

(3) In subsection (2) the reference to the staff provision payment is to that payment before any deduction is made from the payment under— (a) section 61S of ITEPA 2003, (b) regulation 19 of the Social Security Contributions (Intermediaries) Regulations 2000, or (c) regulation 19 of the Social Security Contributions (Intermediaries) (Northern Ireland) Regulations 2000.

• (4) After section 1131 insert—

(1131A) (1) This section applies if— (a) a company makes a staff provision payment, (b) the company is treated as making a payment of deemed direct earnings the amount of which is calculated by reference to the amount of the staff provision payment, and (c) the company pays a secondary Class 1 national insurance contribution in respect of the payment of deemed direct earnings. (2) In determining the company's qualifying expenditure on externally provided workers in accordance with section 1129(2) or section 1131(2) the amount of the staff payment provision is to be treated as increased by the amount of the contribution. (3) In determining the company's qualifying expenditure on externally provided workers in accordance with section 1129(2) the aggregate of the relevant expenditure of each staff controller is to be treated as increased by the amount of the contribution. (4) But subsection (2) does not apply to the extent that the expenditure incurred by the company in paying the contribution is met directly or indirectly by a staff controller. (5) “A payment of deemed direct earning” means a payment the company is treated as making by reason of regulation 14 of the Social Security Contributions (Intermediaries) Regulations 2000 or regulation 14 of the Social Security Contributions (Intermediaries) (Northern Ireland) Regulations 2000.

PART 4 — Commencement and transitional provisions

Commencement

24

The amendments made by Part 1 of this Schedule have effect for the tax year 2021-22 and subsequent tax years.

25

The amendments made by Part 2 of this Schedule have effect in relation to deemed direct payments treated as made on or after 6 April 2021.

26

The amendment made by paragraph 18 of this Schedule has effect for the purposes of determining whether section 61D of ITEPA 2003 applies in a case where the payment or benefit mentioned in subsection (1)(b) of that section is received on or after 6 April 2021.

27

The amendment made by paragraph 20 of this Schedule has effect in relation to payments made under a construction contract on or after 6 April 2021.

28

The amendments made by paragraph 23 of this Schedule have effect in relation to expenditure incurred on or after 6 April 2021.

29

Sections 101 to 103 of FA 2009 (interest) come into force on 6 April 2021 in relation to amounts payable or paid to Her Majesty's Revenue and Customs under regulations made by virtue of section 688AA of ITEPA 2003 (as inserted by paragraph 19 of this Schedule).

Transitional provisions

30

• (1) This paragraph applies where—

• (a) the client in the case of an engagement to which Chapter 10 of Part 2 of ITEPA 2003 applies is not a public authority within the meaning given by section 61L of ITEPA 2003 (as that section had effect before the amendments made by paragraph 10 of this Schedule), and

• (b) a chain payment is made on or after 6 April 2021 that can reasonably be taken to be for services performed by the worker before 6 April 2021.

• (2) The chain payment is to be disregarded for the purposes of Chapter 10 of Part 2 of ITEPA 2003.

31

• (1) This paragraph applies where—

• (a) the client in the case of an engagement to which Chapter 10 of Part 2 of ITEPA 2003 applies is not a public authority within the meaning given by section 61L of ITEPA 2003 (as that section had effect before the amendments made by paragraph 10 of this Schedule), and

• (b) one or more qualifying chain payments are made in the tax year 2021-22 or a subsequent tax year (“the tax year concerned”) to the intermediary.

• (2) A chain payment made to the intermediary is a qualifying chain payment if it can reasonably be taken to be for services performed by the worker before 6 April 2021.

• (3) A chain payment made to the intermediary is also a qualifying chain payment if—

• (a) another chain payment (“the earlier payment”) was made before 6 April 2021 to a person other than the intermediary,

• (b) the earlier payment can reasonably be taken to be for the same services as the chain payment made to the intermediary, and

• (c) the person who made the earlier payment would, but for paragraph 25 of this Schedule, have been treated by section 61N(3) and (4) of ITEPA 2003 as making a deemed direct payment to the worker at the same time as they made the earlier payment.

• (4) Chapter 8 of Part 2 of ITEPA 2003 applies in relation to the engagement for the tax year concerned (in addition to Chapter 10 of Part 2 of ITEPA 2003), but as if—

• (a) the amendments made by Part 1 of this Schedule had not been made, and

• (b) the qualifying chain payments received by the intermediary in the tax year concerned are the only payments and benefits received by the intermediary in that year in respect of the engagement.

32

• (1) This paragraph applies for the purposes of paragraphs 30 and 31 where a chain payment (“the actual payment”) is made that can reasonably be taken to be for services of the worker performed during a period that begins before and ends on or after 6 April 2021.

• (2) The actual payment is to be treated as two separate chain payments—

• (a) one consisting of so much of the amount or value of the actual payment as can on a just and reasonable apportionment be taken to be for services performed before 6 April 2021, and

• (b) another consisting of so much of the amount or value of the actual payment as can on a just and reasonable apportionment be taken to be for services performed on or after 6 April 2021.

33

For the purposes of section 61N(5), (5A)(a) and (8)(za) of ITEPA 2003 it does not matter whether the status determination statement concerned is given before 6 April 2021 or on or after that date.

34

For the purposes of section 61T of ITEPA 2003—

• (a) it does not matter whether the representations to the client mentioned in subsection (1) of that section were made before 6 April 2021 or on or after that date, but

• (b) in a case where the representations were made before 6 April 2021 that section has effect as if the reference in subsection (3) to the date the client receives the representations were to 6 April 2021.

SCHEDULE 2

PART 1 — Amendments to F(No.2)A 2017 in consequence of section 15

1

Schedule 11 to F(No.2)A 2017 (employment income provided through third parties: loans etc outstanding on 5 April 2019) is amended as follows.

2

In paragraph 1 (application of Part 7A of ITEPA 2003: relevant step) in sub-paragraph (2) for the words from “before” to the end substitute “ before the end of 5 April 2019. ”

3

For the italic heading before paragraph 2 substitute “Meaning of “ loan ” and “quasi loan” ”.

4

In paragraph 2 (meaning of “loan”, “quasi-loan” and “approved repayment date”) omit sub-paragraph (6).

5

• (1) Paragraph 4 (when an amount of a loan is outstanding: certain repayments to be disregarded) is amended as follows.

• (2) In sub-paragraph (1)(b)(ii) for “the relevant date” substitute “ 5 April 2019 ”.

• (3) In sub-paragraph (2) for “the relevant date” substitute “ 5 April 2019 ”.

• (4) Omit sub-paragraph (4).

6

In paragraph 5 (meaning of “outstanding”: loans where A or B acquires a right to payment of the loan) in sub-paragraph (1)(b) for “6 April 1999” substitute “ 9 December 2010 ”.

7

In paragraph 13 (meaning of “outstanding”: quasi-loans where A or B acquires a right to the payment or transfer of assets) in sub-paragraph (1)(b) for “6 April 1999” substitute “ 9 December 2010 ”.

8

Omit paragraph 19 (meaning of “approved fixed term loan”) and the italic heading before that paragraph.

9

For the heading of Part 2 substitute “ Accelerated payments ”.

10

Omit paragraphs 20 to 22 and the italic headings before each of those paragraphs.

11

Omit the italic heading before paragraph 23.

12

• (1) Paragraph 23 (accelerated payments) is amended as follows.

• (2) In sub-paragraph (1)—

• (a) in paragraph (d) for “the relevant date” substitute “ 5 April 2019 ”, and

• (b) in paragraph (e) for “the relevant date” substitute “ 5 April 2019 ”.

• (3) Omit sub-paragraph (4).

13

• (1) Paragraph 35A (when the duty to provide loan charge information arises) is amended as follows.

• (2) Omit sub-paragraph (3).

• (3) In sub-paragraph (4) in the words before paragraph (a) for “third” substitute “ second ”.

• (4) In sub-paragraph (5)—

• (a) in the words before paragraph (a) for “fourth” substitute “ third ”,

• (b) in paragraph (a) for the words from the beginning to “conditions” substitute “ neither the first nor the second condition ”, and

• (c) in paragraph (b)—

• (i) for “and (2)(b)” substitute “ and (2) ”, and

• (ii) omit the words from “(and if paragraph” to “omitted)”.

• (5) In sub-paragraph (6) in the words before paragraph (a) for “fourth” substitute “ third ”.

• (6) In sub-paragraph (7) omit paragraph (b).

14

In paragraph 35B (duty of appropriate third party to provide information to A) in sub-paragraph (1) omit “Q,”.

15

• (1) Paragraph 35D (meaning of “loan charge information”) is amended as follows.

• (2) In sub-paragraph (1)—

• (a) in paragraph (e) omit “, or the loan mentioned in paragraph 35A(3)(a),”,

• (b) in paragraph (j) omit “, Q”, and

• (c) in paragraph (k) omit “, or in a case within paragraph 35A(3)(a),”.

• (3) In sub-paragraph (2) omit paragraph (a).

16

• (1) Paragraph 36 (duty to provide loan charge information to B) is amended as follows.

• (2) In sub-paragraph (1)(b) for “6 April 1999” substitute “ 9 December 2010 ”.

• (3) In sub-paragraph (2) for the words from “the period” to the end substitute “ 15 April 2019 ”.

• (4) Omit sub-paragraph (4).

17

Schedule 12 to F(No.2)A 2017 (trading income provided through third parties: loans etc outstanding on 5 April 2019) is amended as follows.

18

For the italic heading before paragraph 2 substitute “Meaning of “ loan ” and “quasi loan” ”.

19

In paragraph 2 (meaning of “loan”, “quasi-loan” and “approved repayment date”) omit sub-paragraph (6).

20

Omit paragraphs 15 to 18 and the italic heading before each of those paragraphs.

21

• (1) Paragraph 19 (accelerated payments: application of paragraph 20) is amended as follows.

• (2) In sub-paragraph (1)—

• (a) in paragraph (e) for “the relevant date” substitute “ 5 April 2019 ”, and

• (b) in paragraph (f) for “the relevant date” substitute “ 5 April 2019 ”.

• (3) Omit sub-paragraph (3).

22

In paragraph 23 (meaning of “loan charge information”) in sub-paragraph (2) omit paragraph (a).

PART 2 — Amendments in consequence of section 16

ITEPA 2003

23

ITEPA 2003 is amended as follows.

24

• (1) Section 554A (application of Chapter 2 of Part 7A: the main case) is amended as follows.

• (2) In subsection (2) after “paragraph 1” insert “ or 1A ”.

• (3) For subsection (4) substitute—

(4) Chapter 2 does not apply by reason of— (a) a relevant step taken on or after A's death if— (i) the relevant step is within section 554B, or (ii) the relevant step is within section 554C by virtue of subsection (1)(ab) of that section, (b) a relevant step within paragraph 1 of Schedule 11 to F(No.2)A 2017 which is treated as being taken on or after A's death, or (c) a relevant step within paragraph 1A of Schedule 11 to F(No.2)A 2017 in a case where the initial step (within the meaning given by sub-paragraph (1)(a) of that paragraph) is treated as being taken on or after A's death.

25

In section 554Z (interpretation: general) in subsection (10)(d) after “paragraph 1” insert “ or 1A ”.

F(No.2)A 2017

26

Schedule 11 to F(No.2)A 2017 (employment income provided through third parties: loans etc outstanding on 5 April 2019) is amended as follows.

27

In paragraph 2 (meaning of “loan”, “quasi-loan” and “approved repayment date”)—

• (a) in sub-paragraph (2), in the words before paragraph (a), for “paragraph 1” substitute “ paragraphs 1 and 1A ”,

• (b) in sub-paragraph (4) for “paragraph 1” substitute “ paragraphs 1 and 1A ”, and

• (c) in sub-paragraph (5) for “paragraph 1” substitute “ paragraphs 1 and 1A ”.

28

In paragraph 3(1) (meaning of “outstanding”: loans) for “paragraph 1” substitute “ paragraphs 1 and 1A ”.

29

In paragraph 4 (when an amount of a loan is outstanding: certain repayments to be disregarded) in sub-paragraph (6) for “the relevant step treated as taken by paragraph 1” substitute “ a relevant step treated as taken by paragraph 1 or 1A ”.

30

In paragraph 5 (meaning of “outstanding”: loans where A or B acquires a right to payment of the loan) in sub-paragraph (2)(b) for “paragraph 1(4)” substitute “ paragraphs 1(4) and 1A(5) ”.

31

In paragraph 7 (meaning of “outstanding”: loans in currencies other than stirling) in sub-paragraph (3) after “relevant step” insert “ within paragraph 1 ”.

32

In paragraph 10 (meaning of “outstanding”: loans made in a depreciating currency) in sub-paragraph (1)(b) after “relevant step” insert “ within paragraph 1 ”.

33

In paragraph 11(1) (meaning of “outstanding”: quasi-loans) for “paragraph 1” substitute “ paragraphs 1 and 1A ”.

34

In paragraph 12 (certain payments or transfers to be disregarded for the purposes of paragraph 11) in sub-paragraph (5) for “the relevant step treated as taken by paragraph 1” substitute “ a relevant step treated as taken by paragraph 1 or 1A ”.

35

In paragraph 13 (meaning of “outstanding”: quasi-loans where A or B acquires a right to the payment or transfer of assets) in sub-paragraph (2)(b) for “paragraph 1(4)” substitute “ paragraphs 1(4) and 1A(5) ”.

36

In paragraph 15 (meaning of “outstanding”: quasi-loans in currencies other than sterling) in sub-paragraph (3) after “relevant step” insert “ within paragraph 1 ”.

37

In paragraph 18 (meaning of “outstanding”: quasi-loans made in a depreciating currency) in sub-paragraph (1)(b) after “relevant step” insert “ within paragraph 1 ”.

38

After paragraph 35 insert—

(35ZA) Chapter 2 of Part 7A of ITEPA 2003 does not apply by reason of a relevant step within paragraph 1A if that Chapter does not apply by reason of the initial step (within the meaning given by sub-paragraph (1)(a) of paragraph 1A).

Social Security (Contributions) Regulations 2001

39

• (1) The Social Security (Contributions) Regulations 2001 (S.I. 2001/1004) are amended as follows.

• (2) In regulation 22B (amounts to be treated as earnings: Part 7A of ITEPA 2003) in paragraph (3A)(a) after “paragraph 1” insert “ or 1A ”.

• (3) In regulation 22C (amounts to be treated as earnings paid to or for the benefit of the earner: Schedule 11 to F(No.2)A 2017) in paragraph (1)—

• (a) after “paragraph 1” insert “ or 1A ”, and

• (b) after “paragraph 1(2)” insert “ or 1A(3) or (4) ”.

SCHEDULE 3

PART 1 — Reduction in lifetime limit

Reduction in lifetime limit

1

In section 169N of TCGA 1992 (entrepreneurs' relief: amount of relief)—

• (a) in subsection (4), for “£10 million” substitute “ £1 million ”;

• (b) in subsection (4A), for “£10 million” substitute “ £1 million ”.

Commencement

2

The amendments made by paragraph 1 have effect in relation to disposals made on or after 11 March 2020.

Anti-forestalling: unconditional contracts

3

• (1) This paragraph applies where an asset is conveyed or transferred on or after 11 March 2020 under a contract made before that date that is not conditional.

• (2) Despite section 28(1) of TCGA 1992 (disposal under unconditional contract made at time of contract and not at time of later conveyance or transfer), the disposal is to be treated for the purposes of paragraph 2 as taking place at the time the asset is conveyed or transferred, and not at the time the contract is made, unless the condition in sub-paragraph (3) or (4) is met.

• (3) The condition in this sub-paragraph is that—

• (a) the parties to the contract are not connected persons,

• (b) no purpose of entering into the contract was obtaining an advantage by reason of the application of section 28(1) of TCGA 1992, and

• (c) the person making the conveyance or transfer makes a claim which includes a statement that the condition in paragraph (b) is met.

• (4) The condition in this sub-paragraph is that—

• (a) the parties to the contract are connected persons,

• (b) the contract was entered into wholly for commercial reasons,

• (c) no purpose of entering into the contract was obtaining an advantage by reason of the application of section 28(1) of TCGA 1992, and

• (d) the person making the conveyance or transfer makes a claim which includes a statement that the conditions in paragraphs (b) and (c) are met.

• (5) Section 169M(2) and (3) of TCGA 1992 apply to a claim under sub-paragraph (3)(c) or (4)(d) as if it were a claim under that section.

Anti-forestalling: reorganisations of share capital

4

• (1) This paragraph applies where—

• (a) on or after 6 April 2019 but before 11 March 2020, there is a reorganisation, and

• (b) on 11 March 2020—

• (i) the company is the relevant individual's personal company and is either a trading company or the holding company of a trading group, and

• (ii) the relevant individual is an officer or employee of the company or (if the company is a member of a trading group) of one or more companies which are members of the trading group.

• (2) In sub-paragraph (1) “the relevant individual” means—

• (a) where a claim under section 169M of TCGA 1992 is made jointly by the trustees of a settlement and a qualifying beneficiary, the qualifying beneficiary;

• (b) where a claim under that section is made by an individual, the individual.

• (3) Where an election in respect of the reorganisation is made under section 169Q of TCGA 1992 (reorganisations: disapplication of section 127) on or after 11 March 2020, the disposal of the original shares is to be treated for the purposes of paragraph 2 as taking place at the time of the election and not at the time of the reorganisation.

• (4) References in this paragraph to a reorganisation do not include an exchange of shares or securities which is treated as a reorganisation by virtue of section 135 or 136 of TCGA 1992 (but see paragraph 5).

Anti-forestalling: exchanges of securities etc

5

• (1) This paragraph applies where—

• (a) on or after 6 April 2019 but before 11 March 2020, there is an exchange of shares or securities within section 135(1) of TCGA 1992, and

• (b) the condition in sub-paragraph (2) or (3) is met.

• (2) The condition in this sub-paragraph is that—

• (a) the persons who hold shares or securities in company B immediately after the exchange are substantially the same as those who held shares or securities in company A immediately before the exchange, or

• (b) the persons who have control of company B immediately after the exchange are substantially the same as those who had control of company A immediately before the exchange.

• (3) The condition in this sub-paragraph is that—

• (a) the relevant shareholders, taken together, hold a greater percentage of the ordinary share capital in company B immediately after the exchange than they held in company A immediately before the exchange, and

• (b) on 11 March 2020—

• (i) company B is the relevant individual's personal company and is either a trading company or the holding company of a trading group, and

• (ii) the relevant individual is an officer or employee of company B or (if company B is a member of a trading group) of one or more companies which are members of the trading group.

• (4) In sub-paragraph (3)—

• “the relevant individual” means—where a claim under section 169M of TCGA 1992 is made jointly by the trustees of a settlement and a qualifying beneficiary, the qualifying beneficiary;where a claim under that section is made by an individual, the individual;

• “the relevant shareholders” means the persons who—immediately after the exchange, hold shares or securities in company B, andimmediately before the exchange, also held shares or securities in company A.

• (5) For the purposes of sub-paragraph (2)(a), connected persons are to be treated as the same person.

• (6) Where an election in respect of the exchange is made under section 169Q of TCGA 1992 (reorganisations: disapplication of section 127) on or after 11 March 2020, the disposal of the original shares is to be treated for the purposes of paragraph 2 as taking place at the time of the election and not at the time of the exchange.

• (7) Where, before the exchange, the Commissioners for Her Majesty's Revenue and Customs have issued a notification in respect of it under section 138(1) of TCGA 1992 (advance clearance procedure)—

• (a) sections 127 to 131 of that Act apply with the necessary adaptations as if—

• (i) company A and company B were the same company, and

• (ii) the exchange were a reorganisation;

• (b) section 169Q of that Act applies as if the exchange were treated as a reorganisation by virtue of section 135 of that Act.

Interpretation

6

• (1) Paragraphs 2 to 5 are to be construed as if they were contained in Chapter 3 of Part 5 of TCGA 1992, subject to sub-paragraph (2).

• (2) In those paragraphs—

• “company A” and “company B” have the same meanings as in section 135 of TCGA 1992;

• “original shares” has the meaning given by section 126 of TCGA 1992;

• “reorganisation” has the meaning given by that section;

• “trading company” and “trading group” have the meanings given by paragraph 1 of Schedule 7ZA to TCGA 1992.

PART 2 — Re-naming the relief

7

• (1) In section 169H(1) of TCGA 1992 (relief under Chapter 3 of Part 5: introduction), for “to be known as “entrepreneurs' relief”” substitute “ to be known as “business asset disposal relief” ”.

• (2) In consequence of that amendment—

• (a) in the rest of TCGA 1992, for “entrepreneurs' relief”, wherever occurring, substitute “ business asset disposal relief ”;

• (b) in section 169V of TCGA 1992 (operation of deferred entrepreneurs' relief), for “ER purposes”, wherever occurring, substitute “ relevant purposes ”.

• (3) Nothing in this paragraph affects the operation of Chapter 3 of Part 5 of TCGA 1992.

8

This Part of this Schedule has effect for the tax year 2020-21 and subsequent tax years.

SCHEDULE 4

PART 1 — Corporate capital loss restriction

Restriction on deduction from chargeable gains: main provisions

1

Part 7ZA of CTA 2010 (restrictions on obtaining certain deductions) is amended as follows.

2

After section 269ZB insert—

(269ZBA) (1) This section has effect for determining the taxable total profits of a company for an accounting period. (2) The sum of any deductions made by the company for the accounting period under section 2A(1)(b) of TCGA 1992 (allowable losses accruing in earlier accounting periods) may not exceed the relevant maximum. But this is subject to subsection (7). (3) In this section the “relevant maximum” means the sum of— (a) 50% of the company's relevant chargeable gains for the accounting period, and (b) the amount of the company's chargeable gains deductions allowance for the accounting period. (4) Section 269ZF contains provision for determining a company's relevant chargeable gains for an accounting period. (5) A company's “chargeable gains deductions allowance” for an accounting period— (a) is so much of the company's deductions allowance for the period as is specified in the company's tax return as its chargeable gains deductions allowance for the period, and (b) accordingly, is nil if no amount of the company's deductions allowance for the period is so specified. (6) An amount specified under subsection (5)(a) as a company's chargeable gains deductions allowance for an accounting period may not exceed the difference between— (a) the amount of the company's deductions allowance for the period, and (b) the total of any amounts specified for the period under— (i) section 269ZB(7)(a) (trading profits deductions allowance), (ii) section 269ZC(5)(a) (non-trading income profits deductions allowance), and (iii) in the case of an insurance company, section 269ZFC(5)(a) (BLAGAB deductions allowance). (7) Subsection (2) does not apply in relation to a company for an accounting period where, in determining the company's qualifying chargeable gains for the period, the amount given by step 1 in section 269ZF(3) is not greater than nil.

3

• (1) Section 269ZC (restriction on deductions from non-trading profits) is amended in accordance with this paragraph.

• (2) In subsection (2), for “the relevant maximum” substitute “the difference between—

• (a) the relevant maximum, and

• (b) the amount of any deductions made by the company for the accounting period under section 2A(1)(b) of TCGA 1992 (allowable losses accruing in earlier accounting periods).”

• (3) For subsection (3) substitute—

(3) In this section the “relevant maximum” means the sum of— (a) 50% of the company's total relevant non-trading profits for the accounting period, and (b) the amount of the company's total non-trading profits deductions allowance for the accounting period. (3A) A company's “total non-trading profits deductions allowance” for the accounting period is the sum of— (a) the company's non-trading income profits deductions allowance (see subsection (5)), and (b) the company's chargeable gains deductions allowance (see section 269ZBA(5)).

• (4) In subsection (4), for “relevant non-trading profits” substitute “ total relevant non-trading profits ”.

• (5) In subsection (5) for “ “non-trading profits deductions allowance””, in both places it occurs, substitute “ “non-trading income profits deductions allowance” ”.

• (6) In subsection (6)—

• (a) in the words before paragraph (a), for “ “non-trading profits deductions allowance”” substitute “ “non-trading income profits deductions allowance” ”, and

• (b) for paragraph (b) substitute—

(b) the total of any amounts specified for the period under— (i) section 269ZB(7)(a) (trading profits deductions allowance), (ii) section 269ZBA(5)(a) (chargeable gains deductions allowance), and (iii) in the case of an insurance company, section 269ZFC(5)(a) (BLAGAB deductions allowance).

• (7) In subsection (8), for “relevant non-trading profits” substitute “ qualifying non-trading income profits and qualifying chargeable gains ”.

4

In section 269ZD (restriction on deductions from total profits), in subsection (2)(b), after sub-paragraph (i) (before the “and”) insert—

(ia) any deductions made by the company for the accounting period under section 2A(1)(b) of TCGA 1992 (allowable losses accruing in earlier accounting periods),

.

5

In section 269ZF (relevant profits), after subsection (2) insert—

(2A) A company's “relevant chargeable gains” for an accounting period are— (a) the company's qualifying chargeable gains for the accounting period (see subsection (3)), less (b) the company's chargeable gains deductions allowance for the accounting period (see section 269ZBA(5)). But if the allowance mentioned in paragraph (b) exceeds the qualifying chargeable gains mentioned in paragraph (a), the company's “relevant chargeable gains” for the accounting period are nil. (2B) A company's “total relevant non-trading profits” for an accounting period are— (a) the sum of— (i) the company's qualifying non-trading income profits for the period, and (ii) the company's qualifying chargeable gains for the period, less (b) the company's total non-trading profits deductions allowance for the period (see section 269ZC(3A)).

6

In section 269ZF, in subsection (3), for steps 3 to 5 substitute—

Step 3 - trading profits, non-trading income profits and chargeable gains Divide the company's total profits for the accounting period (as modified under step 1(2)) into— (a) profits of a trade of the company (the company's “trading profits”), (b) profits, other than chargeable gains, that are not profits of a trade of the company (the company's “non-trading income profits”), and (c) chargeable gains included in the total profits (the company's “chargeable gains”). Step 4 - apportionment of the step 2 amount (1) Allocate the whole of the step 2 amount to one of, or between two or all of, the following— (a) the company's trading profits, (b) the company's non-trading income profits, and (c) the company's chargeable gains. (2) Reduce, but not below nil, each of the company's trading profits, non-trading income profits and chargeable gains by the amount (if any) allocated to it under paragraph (1). Step 5 - amount of qualifying trading profits, qualifying non-trading income profits and qualifying chargeable gains The amounts resulting from step 3, after any reduction under step 4, are— (a) in the case of the amount in step 3(a), the company's qualifying trading profits, (b) in the case of the amount in step 3(b), the company's qualifying nontrading income profits, and (c) in the case of the amount in step 3(c), the company's qualifying chargeable gains.

7

In section 269ZF(4) (calculation of modified total profits)—

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

• (b) after paragraph (g) insert

; and (h) make no deductions under section 2A(1)(b) of TCGA 1992 (allowable losses accruing in earlier accounting periods).

Insolvent companies

8

After section 269ZW insert—

(269ZWA) (1) This section applies in relation to a company if— (a) the company has gone into insolvent liquidation (see subsection (4)), or (b) a corresponding situation exists in relation to the company in a country or territory outside the United Kingdom. (2) The company's deductions allowance for a winding up accounting period (as determined in accordance with section 269ZR or 269ZW) is to be treated (for all purposes) as increased by— (a) the amount of chargeable gains accruing to the company in the accounting period after deducting any allowable losses accruing to the company in the period, or (b) if lower, the amount of any allowable losses previously accruing to the company, so far as not previously deducted under section 2A(1) of TCGA 1992. (3) In determining the amount of chargeable gains accruing to the company in a winding up accounting period for the purposes of subsection (2), ignore— (a) any chargeable gains (but not any allowable losses) accruing to the company on the disposal of an asset if— (i) section 171(1) of TCGA 1992 (transfers within a group: no gain no loss) applied in relation to the disposal by which the company acquired the asset (the “no gain/no loss disposal”), (ii) the asset was acquired by the company, by virtue of the no gain/no loss disposal, in a winding up accounting period, and (iii) the company making the no gain/no loss disposal has not, at that time, gone into insolvent liquidation, and (b) any chargeable gains (but not any allowable losses) transferred to the company in accordance with an election made under section 171A of TCGA 1992 (election to reallocate gain or loss to another member of the group) if— (i) the election is made in a winding up accounting period, and (ii) the company from which the chargeable gain is transferred has not, at the time the election is made, gone into insolvent liquidation. (4) For the purposes of this section, a company has gone into insolvent liquidation if— (a) it has gone into liquidation, within the meaning of section 247(2) of the Insolvency Act 1986 or article 6(2) of the Insolvency (Northern Ireland) Order 1989 (SI 1989/2405 (NI 19), and (b) at the time it goes into liquidation, its assets are insufficient for the payment of its debts and other liabilities and the expenses of the winding up. (5) In this section a “winding up accounting period” means— (a) the accounting period of the company that begins when the winding up starts (within the meaning of section 12(7) of CTA 2009), and (b) each subsequent accounting period.

9

In section 269ZZ (company tax return to specify amount of deductions allowance), in subsection (1), after paragraph (a) (but before the “and”) insert—

(aa) if section 269ZWA (increase of deductions allowance for insolvent companies) applies, what that amount would be without the increase provided for by subsection (2) of that section,

.

Companies without a source of chargeable income

10

After section 269ZY of CTA 2010 insert—

(269ZYA) (1) This section applies in relation to a company and a financial year (“the relevant financial year”) if— (a) the company has no source of chargeable income (see subsection (2)) throughout the relevant financial year, and (b) if the company is a member of a group (see section 269ZZB) at any time during the relevant financial year, each other company that is, at any time during the relevant financial year, a member of the group has no source of chargeable income throughout the relevant financial year. (2) For the purposes of this section and section 269ZYB, a company “has no source of chargeable income” if the company is either— (a) not within the charge to corporation tax, or (b) chargeable to corporation tax only because of a chargeable gain accruing to the company on the disposal of an asset. (3) A company may make a claim under this section in respect of an accounting period if— (a) the accounting period falls wholly within the relevant financial year, and (b) the company is chargeable to corporation tax for the accounting period only because of a chargeable gain accruing to the company on the disposal of an asset. (4) If a claim is made by a company under this section in respect of an accounting period (a “claim AP”), the company's deductions allowance for the claim AP is the lower of— (a) the available deductions allowance amount (see subsection (9)), (b) the total amount of allowable losses accruing to the company in any previous accounting period, so far as not previously deducted under section 2A(1)(a) or (b) of TCGA 1992, and (c) the chargeable gains accruing to the company in the claim AP. (5) A claim under this section in respect of an accounting period— (a) must be made within the period of two years after the end of the accounting period, but (b) may not be made before the end of the relevant financial year. (6) Sections 269ZR to 269ZY (deductions allowances) do not apply to a claim AP. (7) Subsection (8) applies if— (a) there is at least one claim AP falling wholly within the relevant financial year, and (b) there is at least one accounting period falling wholly within the relevant financial year in respect of which no claim is made under this section (an “alternative AP”). (8) The company's deductions allowance for an alternative AP is the lower of— (a) the deductions allowance that would be available, ignoring the effect of this section (see sections 269ZR to 269ZY), and (b) the available deductions allowance amount (see subsection (9)). (9) For the purposes of this section, the “available deductions allowance amount” is— (a) £5,000,000, less (b) the total of the deductions allowance amounts (if any) already claimed by— (i) the company, and (ii) if the company is a member of a group at any time during the relevant financial year, each other company that is, at any time during the relevant financial year, a member of the group, in respect of each claim AP and alternative AP that falls wholly within the relevant financial year. (10) In this section, references to the deductions allowance amounts claimed by a company in respect of an accounting period— (a) for a claim AP, are references to any deductions allowance claimed by the company under this section in respect of the period, and (b) for an alternative AP, are references to any other amount specified in the company's tax return as its chargeable gains deductions allowance for the period. (11) For the purposes of subsection (9)(b), in the cases listed in the first column of the table below, the rules in the second column apply to determine the order in which deductions allowance amounts are to be treated as claimed in respect of the accounting periods—

Case	Rule
1. There is a claim AP and another claim AP starting on the same day or a different day.	The order in which the claims under this section are made.
2. There is an alternative AP (“AP1”) and another alternative AP (“AP2”) starting on a later day.	AP1 before AP2.
3. There is an alternative AP and another alternative AP starting on the same day.	The order in which the tax returns for the alternative APs are delivered.
4. There is a claim AP and an alternative AP starting on the same day, an earlier day or a later day.	The claim AP before the alternative AP.

(269ZYB) (1) This section applies in relation to a company and an accounting period if— (a) the conditions in section 269ZYA(3)(a) and (b) are met in relation to the accounting period, and (b) the company's tax return for the accounting period is delivered before the end of the financial year in which the accounting period falls (“the relevant financial year”). (2) The company may make a declaration in the return for the accounting period that— (a) at all earlier times in the relevant financial year— (i) the company had no source of chargeable income (see section 269ZYA(2)), and (ii) if the company is a member of a group, each other member of the group had no source of chargeable income, and (b) the person intends to make a claim under section 269ZYA(3) in respect of the accounting period. (3) Until the declaration ceases to have effect, section 269ZYA has effect as if the company had made a claim under that section. (4) The declaration ceases to have effect if— (a) it is withdrawn, (b) it is superseded by a claim made under section 269ZYA, or (c) the company or, if the company is a member of a group, another member of the group, acquires a source of chargeable income before the end of the relevant financial year. (5) So far as not previously ceasing to have effect under subsection (4), the declaration ceases to have effect two years after the end of the accounting period in respect of which it is made. (6) If the declaration ceases to have effect, all necessary adjustments must be made, by assessment, amendment of returns or otherwise. (7) Subsection (6) applies despite any limitation on the time within which assessments or amendments may be made.

Offshore collective investment vehicles

11

In section 269ZZB of CTA 2010 (meaning of “group”), at the end insert—

(9) For the purposes of the application of this Part in relation to a collective investment vehicle to which paragraph 4 of Schedule 5AAA to TCGA 1992 applies, the reference in paragraph 4(2) of that Schedule to “relevant purposes” is to be treated as including a reference to the purposes of this section.

Insurance companies: ring fence

12

• (1) Section 210A of TCGA 1992 (insurance: ring-fencing of losses) is amended as follows.

• (2) In subsection (2), after “to the company”, in the first place it occurs, insert “ as permitted by subsection (2A) ”.

• (3) After subsection (2) insert—

(2A) The following deductions may be made from the shareholders' share of the BLAGAB chargeable gains accruing to the company in an accounting period— (a) any available non-BLAGAB allowable losses accruing to the company in the period may be deducted under section 2A(1)(a), and (b) after making any deductions within paragraph (a), any available non-BLAGAB allowable losses previously accruing to the company, which have not been allowed as a deduction from chargeable gains accruing in the period or in any previous accounting period, may (subject to section 269ZFC of CTA 2010) be deducted under section 2A(1)(b). (2B) But those deductions may not reduce the shareholders' share of BLAGAB chargeable gains below nil. (2C) The amount of “available non-BLAGAB allowable losses” accruing to a company in an accounting period is the amount by which the non-BLAGAB allowable losses accruing to the company in the accounting period exceed the non-BLAGAB chargeable gains so accruing.

• (4) In subsection (6)(a)—

• (a) omit “amount by which”, and

• (b) omit “exceeds the shareholders' share of BLAGAB chargeable gains so accruing”.

• (5) In subsection (8), in the words before paragraph (a)—

• (a) for “If the” substitute “ If there are ”, and

• (b) omit “exceed the BLAGAB allowable losses so accruing”.

• (6) In subsection (8)(b), after “deduction” insert “ , under step 2 of section 75(1) of FA 2012, ”.

• (7) For subsection (9) substitute—

(9) If there are BLAGAB allowable losses accruing to the company in the subsequent accounting period, the amount arrived at under subsection (7)(a) is increased by the shareholders' share of the amount of those allowable losses.

• (8) In subsection (13)—

• (a) in the definition of “BLAGAB allowable losses”, at the end insert “ but excluding any allowable losses deducted under step 2 of section 75(1) of FA 2012 in determining the BLAGAB chargeable gains of the company for an accounting period, ”;

• (b) in the definition of “BLAGAB chargeable gains”, after “means chargeable gains” insert “ (as adjusted for allowable losses in accordance with section 75 of FA 2012) ”.

13

After section 269ZFB of CTA 2010 insert—

(269ZFC) (1) This section has effect for determining the taxable total profits of an insurance company for an accounting period. (2) The sum of any deductions of non-BLAGAB allowable losses from the shareholders' share of BLAGAB chargeable gains made by an insurance company for an accounting period under section 2A(1)(b) of TCGA 1992, as permitted by section 210A(2A)(b) of that Act, may not exceed the relevant maximum. (3) In this section, the “relevant maximum” means the sum of— (a) 50% of the company's relevant BLAGAB chargeable gains for the accounting period, and (b) the amount of the company's BLAGAB deductions allowance for the accounting period. (4) A company's “relevant BLAGAB chargeable gains” for an accounting period are— (a) the shareholders' share of the BLAGAB chargeable gains for the accounting period, after any reduction under section 210A(2A)(a) of TCGA 1992, less (b) the amount of the company's BLAGAB deductions allowance for the accounting period. But if the allowance mentioned in paragraph (b) exceeds the shareholders' share of the BLAGAB chargeable gains mentioned in paragraph (a), the company's “relevant BLAGAB chargeable gains” for the accounting period are nil. (5) A company's “BLAGAB deductions allowance” for an accounting period— (a) is so much of the company's deductions allowance for the period as is specified in the company's tax return as its BLAGAB deductions allowance for the period, and (b) accordingly, is nil if no amount of the company's deductions allowance for the period is so specified. (6) An amount specified under subsection (5)(a) as the company's BLAGAB deductions allowance for an accounting period may not exceed the difference between— (a) the amount of the company's deductions allowance for the period, and (b) the total of any amounts specified for the period under section 269ZB(7)(a) (trading profits deductions allowance), section 269ZBA(5)(a) (chargeable gains deductions allowance) and section 269ZC(5)(a) (non-trading income profits deductions allowance). (7) In this section, “BLAGAB chargeable gains”, “insurance company” and “the shareholders' share of BLAGAB chargeable gains” have the same meaning as in section 210A of TCGA 1992.

14

• (1) Part 7ZA of CTA 2010 is amended in accordance with this paragraph.

• (2) In section 269ZD(2)(b)—

• (a) omit the “and” after sub-paragraph (ia) (inserted by paragraph 4 of this Schedule), and

• (b) after sub-paragraph (ii) insert

and (iia) any deductions of non-BLAGAB allowable losses from the shareholders' share of BLAGAB chargeable gains made for the accounting period under section 2A(1)(b) of TCGA 1992, as permitted by section 210A(2A)(b) of that Act.

• (3) In section 269ZFB(2), at the end of paragraph (b) insert “and provided that no deductions of non-BLAGAB allowable losses from the shareholders' share of BLAGAB chargeable gains are to be made under section 2A(1)(b) of TCGA 1992, as permitted by section 210A(2A)(b) of that Act.”

15

In section 95 of FA 2012 (use of non-BLAGAB allowable losses to reduce I-E profit) for “in accordance with section 210A(2) of TCGA 1992” substitute “ under section 2A(1) of TCGA 1992, as permitted by section 210A(2) and (2A) of that Act, ”.

Oil activities: ring fence

16

In section 197 of TCGA 1992 (disposals of interests in oil fields etc: ring fence provisions), after subsection (4) insert—