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Finance Act 2022

Type Public General Act

Publication 2022-02-24

Last updated 2025-04-01

State In force

Department Statute Law Database

Source legislation.gov.uk

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(528ZA) (1) This section applies for the purposes of section 528(3)(b) (listing requirement where at least 70% of shares are owned by institutional investors). (2) A person “owns” ordinary share capital if the person owns it— (a) directly, (b) indirectly, or (c) partly directly and partly indirectly. (3) Sections 1155 to 1157 (meaning of “indirect ownership” and calculation of amounts owned indirectly) apply for the purposes of subsection (2). (4) For the purposes of sections 1155 to 1157 as applied by subsection (3), treat references to a body corporate as including— (a) an exempt unauthorised unit trust, (b) anything which is included in references to a body corporate for the purposes of paragraph 46 of Schedule 5AAA to the TCGA 1992 (UK property rich collective investment vehicles etc) (see sub-paragraph (12) of that paragraph), and (c) an authorised contractual scheme which is a co-ownership scheme, and, in relation to an entity within paragraph (a), (b) or (c), references to ordinary share capital are to be treated as references to units or other corresponding interests in the entity concerned. (5) A person is also to be regarded as owning ordinary share capital in a company in circumstances where the person would be regarded as holding shares in a company under paragraphs 12 and 13 of Schedule 7AC to TCGA 1992 (exemptions for disposals by companies with substantial shareholding). (6) Where the assets of a partnership include ordinary share capital of a company, each partner is to be regarded as owning a proportion of that share capital equal to the partner’s proportionate interest in that ordinary share capital. (7) But subsection (6) does not apply in relation to a limited partnership which is a collective investment scheme as mentioned in section 528(4A)(c) at any time when the partnership meets the genuine diversity of ownership condition (see section 528ZB (2)). (8) In subsection (4)— - “authorised contractual scheme” and “co-ownership scheme” have the meanings given by sections 237(3) and 235A, respectively, of FISMA 2000; - “exempt unauthorised unit trust” has the same meaning as in the Unauthorised Unit Trusts (Tax) Regulations 2013 (S.I. 2013/2819). (528ZB) (1) For the purposes of section 528(3)(b) (listing requirement where at least 70% of shares are owned by institutional investors), where shares are owned by a person acting on behalf of a limited partnership which is a collective investment scheme as mentioned in section 528(4A)(c), the person is to be treated as an institutional investor only if the collective investment scheme meets the genuine diversity of ownership condition. (2) A collective investment scheme meets the genuine diversity of ownership condition at any time if, at that time, it meets— (a) the conditions in regulation 75(2), (3) and (4)(a) of the Offshore Funds (Tax) Regulations 2009 (S.I. 2009/3001), or (b) the condition in regulation 75(5) of those Regulations (assuming for this purpose that regulation 75(4)(b) is omitted), and those Regulations apply for the purposes of this subsection as if any collective investment scheme which is not an offshore fund were regarded as an offshore fund. (3) For the purposes of determining whether a collective investment scheme meets the genuine diversity of ownership condition as mentioned in subsection (2), the fact that (for any reason) the capacity of the vehicle to receive investments is limited does not prevent regulation 75(3) of the Offshore Funds (Tax) Regulations 2009 (including as it applies for the purposes of regulation 75(5) of those Regulations) from being met. (4) Subsection (3) does not apply if— (a) the limited capacity of the scheme to receive investments is fixed by the documents of the vehicle (or otherwise), and (b) a pre-determined number of specific persons, or specific groups of connected persons, make investments in the vehicle that collectively exhaust all, or substantially all, of that capacity. (5) For the purposes of determining whether a collective investment scheme constituted before 1 April 2022 meets the genuine diversity of ownership condition as mentioned in subsection (2), it is to be assumed that regulation 75(2) of the Offshore Funds (Tax) Regulations 2009 (including as it applies for the purposes of regulation 75(5) of those Regulations) has effect as if it referred to a statement prepared by the manager of the scheme, available to HMRC, which— (a) specifies the intended categories of investor when the scheme was marketed, (b) confirms that the interests in the scheme were made widely available, and (c) confirms that interests in the scheme were marketed and made available in accordance with the requirements of regulation 75(4)(a) of those Regulations (and that provision is to be read accordingly).

Requirements for financial statements

3

(1) In section 531 (conditions as to balance of business)—

(a) in subsection (2)—

(i) in paragraph (a) omit “(as shown in the financial statement under section 532(2)(a))”;

(ii) in paragraph (b) omit “(as shown in the financial statement under section 532(2)(c))”;

(b) after subsection (2) insert—

(2A) Where the matters mentioned in section 533(1)(a) to (ca) must be specified in a financial statement under section 532(2)(a) or (c) in relation to each member of a group (see section 533(1C))— (a) the reference in subsection (2)(a) to the profits of property rental business of members of the group are to those profits as shown in the financial statement under section 532(2)(a), and (b) the reference in subsection (2)(b) to the profits of residual business of members of the group are to those profits as shown in the financial statement under section 532(2)(c).

;

(c) in subsection (6), in the words before paragraph (a), after “group” insert “, where the matters mentioned in section 533(1)(d) must be specified in a financial statement under section 532(2)(a) and (c) in relation to each member of the group (see section 533(1G))”.

(2) In section 533 (financial statements: supplementary)—

(a) in subsection (1)—

(i) in the words before paragraph (a), omit “each member of”;

(ii) omit the “and” at the end of paragraph (c);

(iii) after paragraph (c) insert—

(ca) the items specified in section 531(4)(b) to (d), and

;

(iv) in paragraph (d), in the words before sub-paragraph (i), after “assets” insert “, including assets within subsection (1ZA),”;

(b) after subsection (1) insert—

(1ZA) Assets are within this subsection if they are held solely— (a) in connection with the items mentioned in section 531(4)(b) and (c), or (b) as a result of compliance with planning obligations entered into as mentioned in section 531(4)(d).

;

(1B) Subsection (1C) applies where in the accounting period for which statements are prepared under section 532(2) profits of the group’s property rental business are less than 80% of the sum of— (a) the profits of property rental business of the group, and (b) the profits of residual business of the group. (1C) In addition to being specified in relation to the group, the matters mentioned in subsection (1)(a) to (ca) must be specified in a financial statement under section 532(2)(a) or (c) in relation to each member of the group. (1D) For the purposes of establishing whether subsection (1C) applies— (a) the references to profits in subsection (1B) are to profits determined in the same way as profits are determined in accordance with section 531(4); (b) any expenses relating to both property rental business and residual business are to be apportioned on a just and reasonable basis. (1E) Where the effect of subsections (1B) and (1C) is that there is no requirement to specify in a financial statement for an accounting period under section 532(2)(a) or (c) the matters mentioned in subsection (1)(a) to (ca) in relation to each member of a group, it is to be assumed that the group meets condition A in section 531(1) in relation to that accounting period. (1F) Subsection (1G) applies where, at the beginning of the accounting period for which statements are prepared under section 532(2), the sum of— (a) the value of the assets relating to property rental business, and (b) the value of the assets relating to residual business so far as consisting of cash or relevant UK REIT shares, is less than 80% of the total value of assets held by the group. (1G) In addition to being specified in relation to the group, the matters mentioned in subsection (1)(d) must be specified in a financial statement under section 532(2)(a) or (c) in relation to each member of the group. (1H) For the purposes of establishing whether subsection (1G) applies, references to assets in subsection (1F) are to the assets excluding— (a) assets held solely in connection with the items mentioned in section 531(4)(b) and (c), and (b) assets held solely as a result of compliance with planning obligations entered into as mentioned in section 531(4)(d). (1I) Where the effect of subsections (1F) and (1G) is that there is no requirement to specify in a financial statement for an accounting period under section 532(2)(a) or (c) the matters mentioned in subsection (1)(d) in relation to each member of a group, it is to be assumed that the group meets condition B in section 531(5) in relation to that accounting period.

Balance of business test

4

(1) In section 531 (conditions as to balance of business)—

(a) in subsection (4)—

(i) in the words before paragraph (a) omit “In the case of a company,”;

(ii) in the words before paragraph (a), for “(1) and (3)” substitute “(1) to (3)”;

(iii) omit the “and” at the end of paragraph (b);

(iv) at the end of paragraph (c) insert

, and (d) profits of residual business of the company or, as the case may be, group resulting from compliance with planning obligations entered into in accordance with section 106 of the Town and Country Planning Act 1990 in the course of the property rental business of the company or group.

;

(b) after subsection (7) insert—

(7A) References in subsections (5) to (7) to assets are to assets excluding— (a) assets held solely in connection with the items mentioned in subsection (4)(b) and (c), and (b) assets of residual business of members of the group or of the company held solely as a result of compliance with planning obligations entered into as mentioned in subsection (4)(d).

(2) In consequence of the amendments made by sub-paragraph (1), in the Real Estate Investment Trusts (Financial Statements of Group Real Estate Investment Trusts) Regulations 2006 (S.I. 2006/2865), omit regulation 7.

Holders of excessive rights

5

In section 553 (meaning of “holder of excessive rights”), in subsection (1), after paragraph (b) insert

, other than a person to whom a payment of a distribution must be made without deduction of income tax in accordance with regulation 7 of the Real Estate Investment Trusts (Assessment and Recovery of Tax) Regulations 2006 (S.I. 2006/2867) (gross payment of distributions).

Application and commencement

6

(1) The amendments made by paragraphs 2 to 4 have effect in relation to accounting periods (within the meaning of Part 12 of CTA 2010) that begin on or after 1 April 2022.

(2) Paragraph 5 comes into force on 1 April 2022.

SCHEDULE 4

PART 1 — Consequential amendments

CTA 2010

1

(1) CTA 2010 is amended as follows.

(2) Omit section 129(3).

(3) Omit sections 135 and 136 together with the heading before section 135.

(4) In section 137(1) (deduction from total profits), omit “or 135”.

(5) In section 142 (meaning of “the overlapping period”)—

(a) in subsection (1) omit the words from “or” to the end;

(b) in subsection (3) for “consortium condition 3” to the end substitute “or, consortium condition 3.”

(6) In section 168 (meaning of “the relevant accounting period”), omit subsections (2) and (3).

(7) In section 179(3) (cases in which surrendering or claimant company is non-UK resident), omit the words from “But” to the end.

(8) In section 188(1) (other definitions)—

(a) in the definition of “the claimant company” omit the words from “or” to the end;

(b) in the definition of “the claim period” omit the words from “or” to the end;

(d) in the definition of “surrendering company” omit the words from “or” to the end;

(e) in the definition of “the surrender period” omit the words from “or” to the end.

(9) In section 269DB (meaning of “non-banking group relief”)—

(a) in subsection (1) omit paragraph (b) and the “or” preceding it;

(b) omit subsections (2) to (8).

(10) In Schedule 4 (index of defined expressions) omit the following entries—

(a) “EEA accounting period”;

(b) “EEA amount”;

(d) “EEA territory”.

FA 2013

2

Omit section 30 of FA 2013 (loss relief surrenderable by non-UK resident established in EEA state).

Taxes (Amendments) (EU Exit) Regulations 2019 (S.I. 2019/689)

3

In the Taxes (Amendments) (EU Exit) Regulations 2019, omit regulation 17(2), (3) and (4).

PART 2 — Commencement

4

(1) The amendments made by section 24(3) and paragraph 1 of this Schedule, and section 24(5) and paragraph 3 of this Schedule so far as they relate to those amendments, have effect—

(a) in relation to any accounting period of a claimant company beginning on or after the commencement day, and

(b) in relation to any period (“the loss period”) beginning on or after the commencement day in which any loss or other amount arises to a non-UK resident company.

(2) If an accounting period (a “straddling period”) of a claimant company begins before the commencement day and ends on or after that day—

(a) so much of the straddling period as falls before the commencement day, and

(b) so much of the straddling period as falls on or after that day,

are to be treated as separate periods for the purposes of the provisions mentioned in sub-paragraph (1).

(3) The amount of the claimant company’s profits for the straddling period is to be attributed, on an apportionment in accordance with this paragraph, to those separate accounting periods.

(4) If the loss period of the non-UK resident company begins before the commencement day and ends on or after that day—

(a) so much of the loss period as falls before the commencement day, and

(b) so much of the loss period as falls on or after that day,

are to be treated as separate periods for the purposes of the provisions mentioned in sub-paragraph (1).

(5) The amount of the loss or other amount of the non-resident company for the loss period is to be attributed, on an apportionment in accordance with this paragraph, to those separate accounting periods.

(6) Any apportionment under this paragraph is to be made—

(a) on a time basis according to the respective lengths of the periods, or

(b) if that method produces a result that is unjust or unreasonable, on a just and reasonable basis.

5

(1) The amendments made by section 24(2) and paragraph 2 of this Schedule, and section 24(5) and paragraph 3 of this Schedule so far as they relate to those amendments, have effect in relation to accounting periods beginning on or after the commencement day.

(2) If an accounting period (a “straddling period”) of a surrendering company begins before the commencement day and ends on or after that day—

(a) so much of the straddling period as falls before the commencement day, and

(b) so much of the straddling period as falls on or after that day,

are to be treated as separate periods for the purposes of the provisions mentioned in sub-paragraph (1).

(3) Any apportionment under this paragraph is to be made—

(a) on a time basis according to the respective lengths of the periods, or

(b) if that method produces a result that is unjust or unreasonable, on a just and reasonable basis.

6

(1) The amendments made by section 24(4), and section 24(5) and paragraph 3 of this Schedule so far as they relate to those amendments, have effect in relation to accounting periods beginning on or after the commencement day.

(2) If an accounting period (a “straddling period”) of a surrendering company begins before the commencement day and ends on or after that day—

(a) so much of the straddling period as falls before the commencement day, and

(b) so much of the straddling period as falls on or after that day,

are to be treated as separate periods for the purposes of the provisions mentioned in sub-paragraph (1).

(3) Where the surrendering company surrenders any amount of loss that has been carried forward to the straddling period, it may determine how much (if any) of the loss is surrendered in relation to each of the separate accounting periods.

7

In this Part—

“claimant company” has the meaning given by section 135(2) of CTA 2010;

“commencement day” means 27 October 2021;

“surrendering company” has the meaning given by section 99(7) of CTA 2010.

SCHEDULE 5

PART 1 — Power to make provision in connection with IFRS 17

1

(1) The Treasury may by regulations make such provision as they consider appropriate for the purposes of corporation tax in connection with the introduction of or any amendment to International Financial Reporting Standard 17 (insurance contracts) issued by the International Accounting Standards Board.

(2) Regulations under sub-paragraph (1) may (among other things)—

(a) make different provision for different purposes,

(b) make incidental, supplementary, consequential, transitional, transitory and saving provision, and

PART 2 — Amendments in connection with IFRS 17

2

In FA 2012 omit section 79 (spreading of acquisition expenses).

3

(1) In consequence of the amendment made by paragraph 2 the following amendments are made.

(2) In FA 2012—

(a) in section 76 (meaning of “adjusted BLAGAB management expenses”)—

(i) omit Step 2;

(ii) in Step 4 omit “(adjusted, where relevant, in accordance with step 2)”;

(b) in section 77 (meaning of “ordinary BLAGAB management expenses” etc)—

(i) in subsection (2), in paragraph (a) omit “(but see subsection (3))”;

(ii) omit subsection (3) (acquisition expenses falling to be debited in successive accounting periods);

(i) in subsection (3) (meaning of “deemed BLAGAB management expense for the accounting period”) omit “section 79 or”;

(ii) in subsection (4) (meaning of “expenses reversed in the accounting period”), in paragraph (a) omit the words in brackets;

(d) omit section 80 (section 79: meaning of “acquisition expenses”);

(e) in section 81 (amounts treated as ordinary BLAGAB management expenses) omit subsection (5);

(f) in section 82(2) (restrictions in relation to ordinary BLAGAB management expenses) omit the words from “; but” to the end;

(g) in section 108(3) (meaning of a “BLAGAB matter”) omit paragraph (b);

(h) in section 128 (relief for transferee in respect of transferor’s BLAGAB expenses)—

(i) in the heading, after “transferor’s” insert “excess”;

(ii) omit subsections (2) to (4);

(i) in Part 3 of Schedule 16 (minor and consequential amendments), in paragraph 210 (amendment of section 1297 of CTA 2009) omit sub-paragraph (3).

(3) In section 1297 of CTA 2009 (basic life assurance and general annuity business) omit subsections (2) and (3).

4

This Part comes into force on such day as the Treasury may by regulations appoint (and different days may be appointed for different purposes).

5

The Treasury may by regulations make transitional, transitory or saving provision in connection with the coming into force of this Part.

6

Regulations under paragraph 5 may make different provision for different purposes.

SCHEDULE 6

Amendment to TCGA 1992

1

For section 26A of TCGA 1992 (transfer of dormant bank or building society account) substitute—

(26A) (1) This section applies where there is a transfer in respect of a dormant asset. (2) There is a transfer in respect of a dormant asset where an amount is transferred by an institution in respect of an asset— (a) to an authorised reclaim fund, with the result that section 1 of the 2008 Act or section 2, 5, 8, 12 or 14 of the 2022 Act applies in relation to the asset, or (b) to an authorised reclaim fund and one or more charities, with the result that section 2 of the 2008 Act applies in relation to the asset. (3) For the purposes of this Act— (a) the transfer is not to be treated as involving any acquisition or disposal of the asset, and (b) rights which a person (“P”) acquires under Part 1 of the 2008 Act or Part 1 or sections 22 to 25 of the 2022 Act (as the case may be) after the transfer are to be treated as the same asset as the original rights, acquired as the original rights were acquired and having the same characteristics as those rights. (4) In this section— - “the 2008 Act” means the Dormant Bank and Building Society Accounts Act 2008; - “the 2022 Act” means the Dormant Assets Act 2022; - “asset” means an asset within the scope of the dormant assets scheme (see section 1(6) of the 2022 Act); - “authorised reclaim fund” has the same meaning as in the Dormant Assets Acts 2008 to 2022; - “the original rights” are P’s rights against the institution immediately before the transfer.

Amendment to FA 2008

2

For section 39 of FA 2008 (dormant bank and building society accounts) substitute—

(39) (1) The Commissioners for Her Majesty’s Revenue and Customs may by regulations— (a) modify Chapters 2 and 3 of Part 15 of ITA 2007 (deduction of income tax on interest payments at source) in relation to interest paid or credited in respect of a relevant dormant asset, and (b) provide that, for the purposes of Chapter 2 of Part 4 of ITTOIA 2005 (charge to income tax on interest), such interest is to be treated as not being paid until the time (if any) at which the balance of the dormant asset is paid out following a claim made by virtue of— (i) section 1(2)(b) or 2(2)(b) of the 2008 Act, or (ii) section 2(2)(b), 5(2)(b), 5(3)(b), 8(2)(b), 12(2)(b), 14(2)(b) or 22(1) of the 2022 Act. (2) A relevant dormant asset is an asset in respect of which an amount is to be, or has been, transferred by an institution— (a) to an authorised reclaim fund, with the result that section 1 of the 2008 Act or section 2, 5, 8, 12 or 14 of the 2022 Act applies in relation to the asset, or (b) to an authorised reclaim fund and one or more charities, with the result that section 2 of the 2008 Act applies in relation to the asset. (3) Interest paid or credited in respect of a relevant dormant asset includes interest paid or credited by a person who administers the asset on behalf of an authorised reclaim fund after the balance has been transferred. (4) In this section— - “the 2008 Act” means the Dormant Bank and Building Society Accounts Act 2008; - “the 2022 Act” means the Dormant Assets Act 2022; - “asset” means an asset within the scope of the dormant assets scheme (see section 1(6) of the 2022 Act); - “authorised reclaim fund” has the same meaning as in the Dormant Assets Acts 2008 to 2022.

Amendments to the Income Tax (Deposit-takers and Building Societies) (Interest Payments) Regulations 2008 (S.I. 2008/2682)

3

(1) The Income Tax (Deposit-takers and Building Societies) (Interest Payments) Regulations 2008 (S.I. 2008/2682) are amended in accordance with sub-paragraphs (2) to (4).

(2) In regulation 2 (interpretation)—

(a) the existing text becomes paragraph (1);

(b) in that paragraph, before the definition of “certificate” insert—

“authorised reclaim fund” has the same meaning as in the Dormant Assets Acts 2008 to 2022;

;

“relevant dormant asset” means—a dormant account the balance of which is to be, or has been, transferred—to an authorised reclaim fund, with the result that section 1 of the Dormant Bank and Building Society Accounts Act 2008 applies in relation to the account, orto an authorised reclaim fund and one or more charities, with the result that section 2 of the Dormant Bank and Building Society Accounts Act 2008 applies in relation to the account, ora dormant asset (within the meaning of section 1(6) of the Dormant Assets Act 2022) the balance of which is to be, or has been, transferred to an authorised reclaim fund with the result that section 2, 8, 12 or 14 of that Act applies in relation to it;

;

(d) in that paragraph, for the definition of “repayment claim” substitute—

“repayment claim” means a claim made by virtue of—section 1(2)(b) or 2(2)(b) of the Dormant Bank and Building Society Accounts Act 2008, orsection 2(2)(b), 8(2)(b), 12(2)(b) or 14(2)(b) of the Dormant Assets Act 2022.

;

(e) after that paragraph insert—

(2) Terms used in regulations 4A and 4B and in the Dormant Assets Acts 2008 to 2022 (apart from “repayment claim”) have the same meaning in those regulations as in those Acts.

(3) In regulation 4A (dormant accounts - postponement of obligation to deduct sum representing income tax)—

(a) in the heading, for “accounts” substitute “asset”;

(b) in each place it occurs, for “account” substitute “asset”.

(4) In regulation 4B, in both places it occurs for “account” substitute “asset”.

Exemption for reclaim amounts in respect of individual investment plans

4

(1) An amount is exempt from income tax and capital gains tax if and to the extent that—

(a) it is paid out of an authorised reclaim fund in respect of a relevant dormant asset, and

(b) the amount transferred to the fund in respect of the asset was an amount owing to a person by virtue of an investment to which regulations under Chapter 3 of Part 6 of ITTOIA 2005 (exemption for income from individual investment plans) applied.

(2) In this paragraph—

“authorised reclaim fund” has the same meaning as in the Dormant Assets Acts 2008 to 2022;

“relevant dormant asset” has the same meaning as in section 39(2) of FA 2008 (as substituted by paragraph 2).

Power to make provision for the purposes of the Income Tax Acts and TCGA 1992 in relation to dormant assets

5

(1) The Treasury may by regulations make provision for the purposes of any provision of the Income Tax Acts or TCGA 1992 in relation to the dormant assets scheme (within the meaning of the Dormant Assets Acts 2008 to 2022).

(2) Regulations under sub-paragraph (1) may, among other things—

(a) amend any provision of the Income Tax Acts or TCGA 1992 (including section 26A of that Act as substituted by paragraph 1);

(b) disapply any provision made by or under those Acts;

(c) provide for any provision made by or under those Acts to have effect with modifications specified in the regulations.

(3) Regulations under sub-paragraph (1) may make provision having effect in relation to times before the regulations are made.

(4) Regulations under sub-paragraph (1) may—

(a) make different provision for different purposes, and

(b) make supplementary, incidental, consequential or transitional or saving provision.

(5) The power conferred by sub-paragraph (1) is not exercisable after 31 December 2023.

Commencement

6

This Schedule comes into force on such day as the Treasury may by regulations appoint.

SCHEDULE 7

PART 1 — RPDT loss relief

Introduction

1

This Part of this Schedule provides that if a company makes an adjusted trading loss in an accounting period the company is to be given relief from RPDT in a subsequent accounting period.

Carry forward of a trading loss to next accounting period

2

(1) Sub-paragraph (2) applies if—

(a) in an accounting period (“the loss-making period”) an RP developer has an adjusted trading loss,

(b) relief is not given for an amount of the loss (“the unrelieved amount”) under Part 2 or 3 of this Schedule (RPDT group reliefs), and

(2) The unrelieved amount is carried forward to the later period and relief for the RP developer is given in accordance with sub-paragraph (3).

(3) The relief is to be given effect in the later period in accordance with section 38 as “allowable RPDT loss relief”.

(4) But sub-paragraph (3) is subject to sub-paragraphs (5) and (6) and section 42.

(5) Sub-paragraph (6) applies in relation to any amount of the unrelieved amount that is greater than the maximum deduction for the later period permitted by section 42 (“the excess amount”).

(6) The excess amount is carried forward to the accounting period after the later period (“the further period”) instead of being given effect in the later period (see paragraph 3).

Carry forward of trading losses to subsequent accounting periods

3

(1) Sub-paragraph (2) applies if—

(a) an amount of an adjusted trading loss is carried forward to a later period under paragraph 2(2),

(b) the RP developer has an excess amount, and

(2) Paragraph 2(2) to (6) apply as if—

(a) references to the unrelieved amount were to the excess amount, and

(b) references to the later period were to the further period.

PART 2 — RPDT group relief

Introduction

4

(1) This Part of this Schedule allows—

(a) a company (“the surrendering company”) to surrender an adjusted trading loss it has for an accounting period to another company (“the claimant company”) that is part of the same relief group, and

(b) enables the claimant company to claim relief from RPDT for that loss.

(2) The relief mentioned in sub-paragraph (1) is called “RPDT group relief”.

5

In this Part of this Schedule, in relation to an adjusted trading loss that a company has for an accounting period—

“surrender period” means an accounting period for which the surrendering company has the loss;

“surrenderable amounts” means an adjusted trading loss so far as eligible for surrender under this Part of this Schedule.

6

In this Part of this Schedule, “company” means any body corporate.

Surrender of company’s losses for an accounting period

7

(1) Sub-paragraph (2) applies if—

(a) a surrendering company has an adjusted trading loss for a surrender period, and

(b) the company is part of a relief group.

(2) The surrendering company may surrender the loss.

Claims for RPDT group relief

8

(1) This paragraph applies in relation to the surrendering company’s surrenderable amounts for the surrender period under paragraph 7.

(2) The claimant company may make a claim for RPDT group relief for an accounting period (“the claim period”) in relation to those amounts (in whole or in part) if—

(a) the surrendering company consents to the claim,

(b) there is a period (“the overlapping period”) that is common to the claim period and the surrender period, and

(c) at a time during the overlapping period the surrendering company and the claimant company are part of the same relief group.

(3) More than one company may make a claim for RPDT group relief in relation to any surrenderable amounts (but the giving of RPDT group relief in relation to any claim is subject to the provisions of this Part of this Schedule).

(4) Paragraph 70(3) and (4) of Schedule 18 to FA 1998 apply for the purposes of any consent given under this paragraph.

Giving of RPDT group relief

9

(1) If a claimant company makes a claim under paragraph 8, the relief is to be given effect in accordance with section 38 as “allowable RPDT group relief”.

(2) The amount of the relief is—

(a) an amount equal to the surrendering company’s surrenderable amounts for the surrender period, or

(b) if the claim is in relation to only part of those amounts, an amount equal to that part.

But this is subject to section 42 and paragraph 10.

(3) The deduction of the relief under section 38 is to be made after the deduction of any relief under Part 1 of this Schedule but before the deduction of any relief under Part 3 of this Schedule.

Limitation on amount of RPDT group relief to be given

10

(1) Paragraph 9(2) is subject to the limitation in sections 138 to 142 of CTA 2010 (general limitation on amount of group relief to be given) as if those sections applied to RPDT group relief under this Part of this Schedule as they apply to group relief under Part 5 of that Act.

(2) For the purposes of sub-paragraph (1)—

(a) section 140 of CTA 2010 (unrelieved part of claimant company’s available total profits) has effect as if—

(i) in subsection (7), for the words from “references to its” to the end there were substituted “references to its adjusted trading profits (within the meaning of section 39 of FA 2022) after the deduction of any relief given under Part 1 of Schedule 7 to FA 2022.”;

(ii) subsection (8) were omitted;

(b) section 142 of CTA 2010 (meaning of the “overlapping period”) has effect as if—

(i) in subsection (1) for the words in parenthesis there were substituted “(see paragraph 8(2)(b) of Schedule 7 to FA 2022)”;

(ii) in subsection (3), for the words from “group relief condition is the” to the end there were substituted “requirement in paragraph 8(2)(c) of Schedule 7 to FA 2022”.

Arrangements for transfer of companies

11

Sections 154 and 155A to 156 of CTA 2010 (arrangements for transfer of member of group of companies etc) apply for the purposes of this Part of this Schedule as they apply for the purposes of Part 5 of that Act, but as if the references in sections 155A(1) and 155B(1) to “or 155(3)” were omitted.

PART 3 — RPDT group relief for carried-forward losses

Introduction

12

(1) This Part of this Schedule—

(a) allows a company (“the surrendering company”) to surrender an adjusted trading loss that has been carried forward to an accounting period of the company (see Part 1 of this Schedule) to another company (“the claimant company”) that is part of the same relief group, and

(b) enables the claimant company to claim relief from RPDT for those losses.

(2) The relief mentioned in sub-paragraph (1) is called “RPDT group relief for carried-forward losses”.

13

In this Part of this Schedule, in relation to losses that a company has carried forward to an accounting period—

“surrender period” means an accounting period to which the surrendering company has carried forward losses;

“surrenderable amounts” means an adjusted trading loss so far as eligible for surrender under this Part of this Schedule.

14

In this Part of this Schedule, “company” means any body corporate.

Surrender of company’s carried-forward losses for an accounting period

15

(1) Sub-paragraph (2) applies if—

(a) an adjusted trading loss is carried forward to a surrender period of a surrendering company under Part 1 of this Schedule,

(b) relief under that Part is not given for an amount of the loss (“the unrelieved amount”), and

(2) The surrendering company may surrender the unrelieved amount.

Claims for RPDT group relief for carried-forward losses

16

(1) This paragraph applies in relation to the surrendering company’s surrenderable amounts for a surrender period under paragraph 15.

(2) The claimant company may make a claim for group relief for carried-forward losses for an accounting period (“the claim period”) if in relation to those amounts (in whole or in part)—

(a) the surrendering company consents to the claim,

(b) there is a period (“the overlapping period”) that is common to the claim period and the surrender period, and

(c) at a time during the overlapping period the surrendering company and the claimant company are part of the same relief group.

(3) More than one company may make a claim for group relief for carried-forward losses in relation to any surrenderable amounts (but the giving of group relief in relation to any claim is subject to the provisions of this Part of this Schedule).

(4) Paragraph 70(3) and (4) of Schedule 18 to FA 1998 apply for the purposes of any consent given under this paragraph.

Giving of RPDT group relief for carried-forward losses

17

(1) If a claimant company makes a claim under paragraph 16, the relief is to be given effect in accordance with section 38 as “allowable RPDT group relief for carried-forward losses”.

(2) The amount of the relief is—

(a) an amount equal to the surrendering company’s surrenderable amounts for the surrender period, or

(b) if the claim is in relation to only part of those amounts, an amount equal to that part.

But this is subject to section 42 and paragraph 18.

(3) The deduction of the relief under section 38 is to be made after the deduction of any relief under Part 1 or 2 of this Schedule.

Limitation on amount of group relief for carried-forward losses to be given

18

(1) Paragraph 17(2) is subject to the limitation in sections 188DB to 188DG of CTA 2010 (general limitation on amount of group relief for carried-forward losses to be given) as if those sections applied to RPDT group relief for carried-forward losses under that paragraph as they apply to group relief for carried-forward losses under section 188CB of that Act.

(2) For the purposes of sub-paragraph (1)—

(a) section 188DC of CTA 2010 (unused part of the surrenderable amounts) has effect as if subsection (4)(a)(ii) were omitted;

(b) section 188DD of CTA 2010 (claimant company’s relevant maximum for overlapping period) has effect as if—

(i) in subsection (1), in Step 1, for “section 269ZD(4)” there were substituted “section 42 of FA 2022”;

(ii) in subsection (1), for Step 2 there were substituted—

Step 2Deduct from that amount the sum of any deductions made by the company for the claim period under paragraphs 2(3) and 9(1) of Schedule 7 to FA 2022.

;

(iii) subsections (2), (3), (3A) and (5) were omitted;

(c) section 188DE of CTA 2010 (previously claimed group relief for carried-forward losses) has effect as if in subsection (2)(a) “or 188CC” were omitted;

(d) section 188DG of CTA 2010 (meaning of the “overlapping period”) has effect as if—

(i) in subsection (1) for the words in parenthesis there were substituted “(see paragraph 16(2)(b) of Schedule 7 to FA 2022)”;

(ii) in subsection (3), for the words from “group relief condition is the” to the end there were substituted “requirement in paragraph 16(2)(c) of Schedule 7 to FA 2022”.

PART 4 — Supplementary provision

Payments for relief

19

(1) This paragraph applies if—

(a) a surrendering company and a claimant company (within the meaning of Part 2 or 3 of this Schedule) have an agreement between them in relation to adjusted trading losses of the surrendering company (“the agreed loss amounts”),

(b) RPDT group relief, or RPDT group relief for carried-forward losses, is given to the claimant company in relation to the agreed loss amounts, and

(c) as a result of the agreement the claimant company makes a payment to the surrendering company that does not exceed the total amount of the agreed loss amounts.

(2) The payment is not to be taken into account in determining the profits or losses of either company under section 39 (adjusted trading profits and losses).

Change in company ownership

20

Part 14 of CTA 2010 (change in company ownership) applies, with any necessary modifications, in relation to RPDT group relief under Part 2 of this Schedule, and RPDT group relief for carried-forward losses under Part 3 of this Schedule, as it applies in relation to loss relief under Parts 5 and 5A to that Act (group reliefs).

Meaning of “relief group”

21

For the purposes of this Schedule, two companies are part of the same “relief group” if—

(a) one is the 75% subsidiary of the other, or

(b) both are 75% subsidiaries of a third company.

Meaning of “adjusted trading loss”

22

For the purposes of this Schedule, references to an RP developer’s “adjusted trading loss” for an accounting period include—

(a) any amount by which joint venture losses that are attributable to that RP developer for period in accordance with section 40 exceed any adjusted trading profits that the RP developer has for that period;

(b) the sum of—

(i) any adjusted trading losses that the RP developer has for that period, and

(ii) any joint venture losses that are attributable to the RP developer for that period in accordance with section 40.

SCHEDULE 8

Amendments of TMA 1970

1

(1) Part 5A of TMA 1970 (payment of tax) is amended as follows.

(2) In section 59E (further provision as to when corporation tax is due and payable), in subsection (11) after paragraph (d) insert—

(e) to any sum chargeable on a company under section 33 of FA 2022 (residential property developer tax) as if it were an amount of corporation tax chargeable on the company.

(3) In section 59F (arrangements for paying corporation tax on behalf of group members), in subsection (6)—

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

(b) after paragraph (c) insert

, and (d) to any sum chargeable on a company under section 33 of FA 2022 (residential property developer tax) as if it were an amount of corporation tax chargeable on the company.

Amendments of FA 1998

2

(1) Schedule 18 to FA 1998 (company tax returns, assessments and related matters) is amended as follows.

(2) In paragraph 1 (meaning of “tax”)—

(a) omit the “and” at the end of the paragraph beginning “section 330(1)”;

(b) omit the “and” at the end of the paragraph beginning “step 5 in section 371BC(1)”;

, and section 33 of the Finance Act 2022 (residential property developer tax).

(3) After paragraph 7 insert—

(7A) (1) A residential property developer must include in its company tax return for an accounting period a statement of— (a) its RPD profits in relation to the accounting period, (b) its adjusted trading profits or adjusted trading losses for that period, (c) the amount of any joint venture profits that are attributable to the developer for that period, (d) any allowable RPDT loss relief which the developer is given for that period, (e) any allowable RPDT group relief claimed by the developer for that period, (f) any allowable RPDT group relief for carried-forward losses claimed by the developer for that period, and (g) its allowance for that period, unless sub-paragraph (2) applies in relation to the accounting period. (2) This sub-paragraph applies where it is reasonable to assume that the developer would have no liability to residential property developer tax in relation to the accounting period if no amount were deducted in the calculation at section 38 of the Finance Act 2022 in relation to that accounting period in respect of any— (a) allowable RPDT loss relief, (b) allowable RPDT group relief, or (c) allowable RPDT group relief for carried-forward losses. (3) Terms used in Part 2 of the Finance Act 2022 have the same meaning in this paragraph as in that Part (unless the contrary intention appears).

(4) In paragraph 8(1) (calculation of tax payable), under the heading “Third step”, at the end insert—

Any amount of residential property developer tax chargeable by virtue of section 33 of the Finance Act 2022.

SCHEDULE 9

Residential property developer tax to be ignored for corporation tax purposes

1

In calculating profits or losses for corporation tax purposes, no deduction is allowed in respect of RPDT.

Payments made for RPDT reliefs to be ignored for corporation tax purposes

2

An amount which is, as a result of section 40(5) or paragraph 19 of Schedule 7, not to be taken account in determining profits or losses under section 39 (adjusted trading profits and losses)—

(a) is also not to be taken into account in calculating profits or losses for the corporation tax purposes, and

(b) is not to be regarded for those purposes as a distribution.

Provision made or imposed between RPD activities and other activities of the same company

3

Chapters 1 and 3 to 6 (read in accordance with Chapters 2 and 8) of Part 4 of TIOPA 2010 (transfer pricing) apply to provision made or imposed as between an RP developer’s RPD activities and other activities carried on by it as if—

(a) those activities were carried on by two different persons,

(b) the provision were made or imposed between those persons by means of a transaction, and

Provision made or imposed between an RP developer and another person under the same control

4

(1) Chapters 1 and 3 to 6 (read in accordance with Chapters 2 and 8) of Part 4 of TIOPA 2010 apply to provision made or imposed as between an RP developer and a relevant company by means of a transaction or series of transactions that—

(a) in relation to the RP developer, falls to be regarded as made or imposed in the course of, or with respect to, the RP developer’s RPD activities, and

(b) in relation to the relevant company, does not fall to be regarded as made or imposed in the course of, or with respect to, RPD activities carried on by that company.

(2) A company is a relevant company if it and the RP developer are under the same control at the time when the provision was made or imposed.

SCHEDULE 10

PART 1 — Charge

Charge on value of assets held for qualifying purposes

1

(1) Where—

(a) a person (“P”) takes disqualifying steps in relation to an asset in disqualifying circumstances, and

(b) the £100 million threshold condition is met in relation to the person (whether before, at the same time as or after those steps were taken),

P is liable to pay a tax equal to 75% of the asset’s adjusted value (see paragraph 3).

(2) The tax is to be known as public interest business protection tax and the Commissioners for Her Majesty’s Revenue and Customs are responsible for its collection and management.

(3) P takes disqualifying steps in relation to an asset in disqualifying circumstances if—

(a) it is reasonable to conclude that the asset was held by P wholly or partly for the purposes of it being used or being available for use for the benefit of a public interest business carried on by P or by a person connected to P,

(b) steps are taken by P, or by P together with others, that result in the asset not being used to some extent, or being no longer available for use to some extent, for the benefit of the business,

(c) the business becomes subject to special measures (whether before, at the same time as, or after those steps were taken),

(d) the taking of those steps materially contributes to—

(i) the business becoming subject to special measures, or

(ii) a significant increase in the costs of carrying on the business, and

(e) P was aware, or ought reasonably to have been aware, that the asset not being used, or being available for use, by the business would have the effect mentioned in paragraph (d)(i) or (ii).

(4) In this Schedule—

(a) “qualifying purposes” means the purposes described in sub-paragraph (3)(a), and

(b) “disqualifying steps” means steps described in sub-paragraph (3)(b), and steps may fall within that description whether or not—

(i) P or any other person receives any consideration in connection with, or otherwise in consequence of, the taking of the steps, or

(ii) P directly participates in all of the steps.

(5) Disqualifying steps include (for example)—

(a) one or more steps that result in the disposal of the asset where some or all of the proceeds of that disposal are (to any extent) not applied for the benefit of the public interest business (including where some of those proceeds are so applied for a time, but subsequently cease to be);

(b) one or more steps that result in the public interest business being deprived in substance of the benefit of the asset to some extent (including where the benefit of the asset is provided to the business at a greater cost to the business than would have reasonably been expected);

(c) one or more steps that facilitate a person benefiting from the asset or its disposal to the detriment of the public interest business;

(d) entering into arrangements which result in the asset no longer being held, or which result in it being held to a lesser extent, for qualifying purposes in relation to the public interest business (including arrangements that include transactions to which the person is not party);

(e) directing, encouraging or causing another person to do something which results in the asset no longer being held, or which result in it being held to a lesser extent, for qualifying purposes in relation to the public interest business.

(6) Steps taken in contemplation of the taking of disqualifying steps (which might include steps taken in relation to the residence of P) are to be treated as disqualifying steps.

(7) Where the taking of a disqualifying step was delayed by the action of a public authority, that step is to be treated as having been taken at the time at which it would, but for that action, have been taken.

(8) In determining, for the purposes of sub-paragraph (3)(d)(ii) whether there has been an increase in the costs of carrying on the public interest business—

(a) those costs are to be taken to include the costs of any person who, as a result of the special measures, takes over (in substance) the carrying on of any of the activities comprised in the carrying on of the business (such as the costs of a person to whom the customers of the business are transferred), and

(b) whether costs have increased is to be determined by reference to what the costs of carrying on the activities comprised in the carrying on of the business would have been—

(i) had those activities all been carried on by the business, and

(ii) had the asset been available for use (including its being used to avoid or offset a cost) in connection with the carrying on of those activities on the same basis it had been available before the taking of the first disqualifying step.

(9) The £100 million threshold condition is met in relation to P if the combined underlying value (as determined in accordance with paragraph 3(2) and (3)) of all assets in respect of which disqualifying steps were taken in disqualifying circumstances by P and by any person who is connected to P exceeds £100 million.

(10) In this Schedule—

“asset” includes a part of an asset;

“disposal” includes anything which would be a disposal for the purposes of TCGA 1992.

Meaning of “public interest business” and “special measures”

2

(1) For the purposes of this Schedule, a business is a “public interest business” if it is—

(a) an energy supply business, or

(b) a business of a description specified in regulations made by the Treasury.

(2) Regulations may only specify a description of business if a special administration regime exists for persons carrying on businesses of that description.

(3) For the purposes of this Schedule a business is subject to special measures if—

(a) the person carrying on the business enters special administration,

(b) it is subject to arrangements, imposed in connection with the insolvency of the person carrying it on by or under an enactment (including by virtue of any licence required by or under an enactment), for the transfer of customers of the business to another business, or

(c) such other circumstances relating to insolvency as may be specified in regulations made by the Treasury exist in relation to the business or the person carrying it on.

(4) In this paragraph—

“energy supply business” means the business of making supplies required to be authorised under—a licence granted under section 7A(1) of the Gas Act 1986 (gas supply licences), ora licence granted under section 6(1)(d) of the Electricity Act 1989 (electricity supply licences);

“special administration” means an insolvency procedure—that is similar or corresponds to ordinary administration, andunder which the administrator has one or more special objectives instead of or in addition to the objectives of ordinary administration;

“special administration regime” means provision made by an enactment that provides for special administration;

“ordinary administration” means the insolvency procedure provided for by—Schedule B1 to the Insolvency Act 1986, orSchedule B1 to the Insolvency (Northern Ireland) Order 1989 (S.I. 1989/2405 (N.I. 19)).

Adjusted value of assets

3

(1) To determine the adjusted value of an asset, take the following steps—

Step 1 - value the assetDetermine the underlying value of the asset.

Step 2 - apply reduction to reflect potential losses as a result of taking stepsDeduct an amount equal to 10% of the underlying value from that value.

(2) The underlying value of the asset is the greater of—

(a) the fair value of the asset immediately before the first disqualifying step was taken in relation to it, and

(b) the amount or value of any consideration paid directly or indirectly in connection with, or otherwise in consequence of, the taking of the disqualifying steps (whether paid to the person taking them or to any other person).

(3) Where it is reasonable to conclude that an asset was held partly for qualifying purposes in relation to the public interest business in question and partly for other purposes, reduce the underlying value so that it reflects the proportion of the asset that can be attributed (on a just and reasonable basis) to its being held for qualifying purposes in relation to the business.

PART 2 — Joint and several liability

Liability of associated companies

4

(1) This paragraph applies to any company, other than a company that is subject to special measures, that was associated, at any point during the disqualifying period, with a company (“the principal taxpayer”) that is liable to public interest business protection tax as a result of paragraph 1.

(2) A company is associated with another if—

(a) one of the two has control of the other, or

(b) both are under the control of the same person or persons.

(3) A company to which this paragraph applies is, together with the principal taxpayer, jointly and severally liable to public interest business protection tax.

(4) In this Schedule the “disqualifying period” means the period commencing with the day on which the first disqualifying step was taken and ending with the last day of the period in which the principal taxpayer must make a return under paragraph 8(1).

Joint and several liability of connected persons and others who may benefit

5

(1) This paragraph applies to a person (“R”) and any person connected to R if—

(a) R or a person connected to R receives the proceeds (whether directly or indirectly) of any consideration paid directly or indirectly in connection with, or otherwise in consequence of, the taking of disqualifying steps by a person liable to public interest business protection tax as a result of paragraph 1 (“the principal taxpayer”), and

(b) the sum of amounts received by R and persons connected to R is equal to or exceeds 5% of the adjusted value of the asset.

(2) This paragraph also applies to a person (“S”) and any person connected to S if—

(a) S or a person connected to S had a qualifying interest in a company, partnership or unincorporated association liable to public interest business protection tax as a result of paragraph 1 (“the principal taxpayer”) during the disqualifying period, and

(b) the sum of qualifying interests S and persons connected to S had in the principal taxpayer during that period was equal to or exceeded 5% (see paragraph 6(1) which defines “qualifying interest” as a proportion).

(3) This paragraph does not apply to a person if the person is liable to tax as a result of paragraph 4 in relation to the same asset.

(4) A person to whom this paragraph applies is, together with the principal taxpayer, jointly and severally liable to public interest business protection tax.

(5) But the liability of a person liable to tax as a result of this paragraph is limited to—

(a) in the case of a person to whom this paragraph applies only as a result of sub-paragraph (1), the amount equal to the sum of the proceeds of consideration received (directly or indirectly) by R and persons connected to R,

(b) in the case of a person to whom this paragraph applies only as a result of sub-paragraph (2), the amount equal to the proportion of the principal taxpayer’s liability that is the same as the sum of qualifying interests S and persons connected to S had during the disqualifying period, and

(c) in the case of a person to whom this paragraph applies as a result of both sub-paragraphs (1) and (2), the greater of the amounts described in paragraphs (a) and (b).

(6) References in this paragraph to the receipt of the proceeds of consideration do not include the receipt of any amount pursuant to a loan if—

(a) the parties to that loan are not connected,

(b) the creditor carries on a business of lending money,

(d) the terms of the loan were agreed between parties dealing at arm’s length.

Qualifying interests in company, partnership or unincorporated association

6

(1) A person (“the qualifying person”) had a qualifying interest in a company, partnership or unincorporated association liable to tax (“the taxed entity”) during the disqualifying period if at any point during the period—

(a) the qualifying person was beneficially entitled to a proportion of the profits available for distribution to equity holders of the taxed entity, or

(b) the qualifying person was beneficially entitled to a proportion of the assets of the taxed entity for distribution to its equity holders on a winding up,

and the qualifying interest of the person is, for the purposes of paragraph 5(2)(b) and (5)(b), to be treated as the greatest of the proportions that applied at any point during the period.

(2) Chapter 6 of Part 5 of CTA 2010 applies for the purposes of determining the proportions of profits or assets of the taxed entity that the qualifying person is beneficially entitled to as it applies for the purposes of determining the proportions of profits or assets of a company that another company is beneficially entitled to (see, in particular, sections 165 and 166 of that Act).

(3) That Chapter has effect for the purposes of sub-paragraph (1) as if—

(a) in sections 170(3) and 172(3) (shares or securities with limited or temporary rights), for “less than” there were substituted “more than”,

(b) in section 174 (option arrangements)—

(i) in subsection (1), in Step 4, for “lowest proportion” there were substituted “highest proportion”, and

(ii) in subsection (2), for “less than” there were substituted “more than”,

(c) in sections 175(3), 176(3), 177(3) and 178(3) (cases in which more than one of sections 170, 172, and 174 apply), for “lowest proportion” there were substituted “highest proportion”, and

(d) sections 179 to 182 were omitted.

(4) That Chapter is to be read, for those purposes, with all modifications necessary to ensure that—

(a) it applies to a company which does not have share capital or to a partnership or unincorporated association, and to holders of corresponding ordinary holdings in such a company, partnership or unincorporated association, in a way which corresponds to the way they apply to companies with ordinary share capital and holders of ordinary shares in such companies,

(b) it applies in relation to ownership through any trust or other arrangement, in a way which corresponds to the way it applies to ownership through a company, and

(c) for the purposes of achieving paragraphs (a) and (b), profits or assets are attributed to holders of corresponding ordinary holdings in partnerships, unincorporated associations, trusts or other arrangements in a manner which corresponds to the way profits or assets are attributed to holders of ordinary shares in a company which is a body corporate.

(5) In this paragraph “corresponding ordinary holding” means a holding or interest which provides the holder with economic rights corresponding to those provided by a holding of ordinary shares.

Claim for relief

7

(1) This paragraph applies to a person who is liable to tax as a result of paragraph 5 if the person can demonstrate that the potential benefit to the person in connection with the taking of disqualifying steps is less than the amount to which the person would otherwise be liable to tax.

(2) References in this paragraph to the potential benefit to the person are to the maximum amount or value by which the person has or could have benefitted, or could benefit, in connection with the taking of those steps, which may (for example) include by—

(a) receiving, or being entitled (whether absolutely or conditionally) to receive, any amount in connection with the taking of the steps;

(b) being entitled (whether absolutely or conditionally) to any assets, or distribution out of assets, whose value is affected by the taking of the steps;

(c) being a person in respect of whom a power or other discretion may be exercised resulting in the receipt of any such amount, assets or distribution;

(d) disposing of, or being able to dispose of, any such assets.

(3) A person to whom this paragraph applies may make a claim to an officer of Revenue and Customs for relief by way of a reduction of the amount to which the person is liable to secure that the amount does not exceed the potential benefit to the person.

(4) No account is to be taken in a claim under this paragraph of—

(a) any amount of costs that may be incurred in connection with the realisation of a potential benefit unless that amount has been paid before making the claim, or

(b) any losses associated with the taking of the disqualifying steps (as the underlying tax has already been reduced as a result of the application of step 2 in paragraph 3(1)).

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