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Finance Act 2024

Type Public General Act

Publication 2024-02-22

Last updated 2025-03-20

State In force

Department Statute Law Database

Source legislation.gov.uk

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Reform history JSON API

(3) In regulation 1 (citation and commencement), for “Lifetime Allowance” substitute “Enhanced Allowances”.

(4) In regulation 4 (the paragraph 14 notice), in paragraph (1)(c), for “make provision for a lifetime allowance enhancement factor” substitute “apply”.

(5) In regulation 13 (preservation of documents), in paragraph (1), for “benefit crystallisation event” substitute “relevant benefit crystallisation event within the meaning of section 637S of ITEPA 2003”.

Amendments of the Registered Pension Schemes and Relieved Non-UK Pension Schemes (Lifetime Allowance Transitional Protection) (Notification) Regulations 2013

97

(1) The Registered Pension Schemes and Relieved Non-UK Pension Schemes (Lifetime Allowance Transitional Protection) (Notification) Regulations 2013 (S.I. 2013/1741) are amended as follows.

(2) In the title, for “Lifetime Allowance” substitute “Enhanced Allowances”.

(3) In regulation 1 (citation and commencement), for “Lifetime Allowance” substitute “Enhanced Allowances”.

(4) In regulation 4 (the paragraph 1 notice), in paragraph (1)—

(a) in sub-paragraph (c), for “make provision for a lifetime allowance enhancement factor” substitute “apply”;

(b) in sub-paragraph (e), for “(transitional provision relating to new standard lifetime allowance for the tax year 2012-13)” substitute “(fixed protection)”.

(5) In regulation 13 (preservation of documents), in paragraph (1), for “benefit crystallisation event” substitute “relevant benefit crystallisation event within the meaning of section 637S of ITEPA 2003”.

Amendments of the Registered Pension Schemes and Relieved Non-UK Pension Schemes (Lifetime Allowance Transitional Protection) (Individual Protection 2014 Notification) Regulations 2014

98

(1) The Registered Pension Schemes and Relieved Non-UK Pension Schemes (Lifetime Allowance Transitional Protection) (Individual Protection 2014 Notification) Regulations 2014 (S.I. 2014/1842) are amended as follows.

(2) In the title, for “Lifetime Allowance” substitute “Enhanced Allowances”.

(3) In regulation 1 (citation and commencement), for “Lifetime Allowance” substitute “Enhanced Allowances”.

(4) In regulation 4 (the paragraph 1 notice), in paragraph (1), in sub-paragraph (f), for “make provision for a lifetime allowance enhancement factor” substitute “apply”.

(5) In regulation 13 (preservation of documents), in paragraph (2), for “benefit crystallisation event” substitute “relevant benefit crystallisation event within the meaning of section 637S of ITEPA 2003”.

Part 5 — Provision of information

Amendments of Part 4 of FA 2004

99

Part 4 of FA 2004 (pension schemes etc) is amended as follows.

100

(1) Section 256 (enhanced lifetime allowance regulations) is amended as follows.

(2) In the heading omit “lifetime”.

(3) In subsection (1)—

(a) omit paragraphs (a) to (c);

(b) in paragraph (d), for “lifetime allowance enhancement” substitute “enhancement of allowances”;

(i) omit “lifetime allowance”;

(ii) omit the “and” at the end;

(d) in paragraph (f)—

(i) for “paragraph 18(6)” substitute “paragraph 18 (1)(b)”;

(ii) for “lifetime allowance enhancement” substitute “enhancement of allowances”;

(e) after paragraph (f) insert—

(g) paragraph 20A (1)(d) of that Schedule (enhancement factor: pension credits from previously crystallised rights), (h) paragraph 20B (1)(b) of that Schedule (enhancement factor: non-residence), and (i) paragraph 20E (1)(b) of that Schedule (enhancement factor: transfers from recognised overseas pension scheme).

(4) In subsection (2) omit “lifetime”.

(5) In subsection (3)—

(a) in the words before paragraph (a) omit “lifetime”;

(b) omit paragraph (a).

(6) In subsection (4), in the words before paragraph (a) omit “lifetime”.

101

(1) Section 261 (enhanced lifetime allowance regulations: documents and information) is amended as follows.

(2) In the heading omit “lifetime”.

(3) In subsection (1)(a) omit “lifetime”.

(4) In subsection (2)—

(a) in paragraph (a), for “lifetime allowance” substitute “lump sum allowance or lump sum and death benefit allowance”;

(b) in paragraph (b), after “pension commencement lump sums” insert “or the uncrystallised funds pension lump sums”.

(5) In subsection (4), in the words before paragraph (a)—

(a) for “lifetime allowance” substitute “lump sum and death benefit allowance”;

(b) for the words “whichever is the higher of” to the end of paragraph (b) substitute “the actual amount of the individual’s lump sum and death benefit allowance at that time.”

(6) In subsection (5)(a)—

(a) for “a benefit crystallisation event” substitute “a relevant benefit crystallisation event within the meaning of section 637S of ITEPA 2003 (availability of individual’s lump sum and death benefit allowance)”;

(b) for “the benefit crystallisation event” substitute “the relevant benefit crystallisation event”.

(7) In subsection (6), in paragraphs (a) and (b), after “pension commencement lump sums” insert “or the uncrystallised funds pension lump sums”.

102

(1) Section 262 (enhanced lifetime allowance regulations: failures to comply) is amended as follows.

(2) In the heading omit “lifetime”.

(3) In paragraphs (a), (b) and (c) omit “lifetime”.

103

(1) Section 263 (lifetime allowance enhanced protection: benefit accrual) is amended as follows.

(2) In the heading omit “Lifetime allowance”.

(3) In subsection (1)(a), for “lifetime allowance charge” substitute “enhancement of allowances”.

Amendments of the Registered Pension Schemes (Provision of Information) Regulations 2006

104

The Registered Pension Schemes (Provision of Information) Regulations 2006 (S.I. 2006/567) are amended as follows.

105

In regulation 2 (interpretation), in paragraph (1)—

(a) at the appropriate places insert—

“relevant benefit crystallisation event”— in relation to a member’s lump sum allowance, has the same meaning as in section 637Q of ITEPA 2003 (availability of individual’s lump sum allowance) in relation to the member; in relation to a member’s lump sum and death benefit allowance, has the same meaning as in section 637S of ITEPA 2003 (availability of individual’s lump sum and death benefit allowance) in relation to the member;

“relevant reference number”, in relation to a member, means a reference number given by or on behalf of the Commissioners in respect of the member under— the Registered Pension Schemes (Enhanced Allowances) Regulations 2006 (S.I. 2006/131) (where the member relies on any provision of Schedule 36 to FA 2004); the Registered Pension Schemes (Enhanced Allowances Transitional Protection) Regulations 2011 (S.I. 2011/1752) (where the member relies on fixed protection under Schedule 18 to FA 2011); the Registered Pension Schemes and Relieved Non-UK Pension Schemes (Enhanced Allowances Transitional Protection) (Notification) Regulations 2013 (S.I. 2013/1741) (where the member relies on fixed protection 2014 under Schedule 22 to FA 2013); the Registered Pension Schemes and Relieved Non-UK Pension Schemes (Enhanced Allowances Transitional Protection) (Individual Protection 2014 Notification) Regulations 2014 (S.I. 2014/1842) (where the member relies on individual protection 2014 under Schedule 6 to FA 2014); paragraph 14 of Schedule 4 to the Finance Act 2016 (where the member relies on fixed or individual protection 2016 under that Schedule);

(b) in the definition of “relevant lump sum death benefit”, for the words from “means” to the end substitute “has the meaning given by section 637S (2)(c) of ITEPA 2003 (availability of individual’s lump sum and death benefit allowance)”.

106

(1) In regulation 3 (provision of information by scheme administrator to the Commissioners for His Majesty’s Revenue and Customs), in paragraph (1), the Table is amended as follows.

(2) Omit the entries for the following reportable events—

(a) payments exceeding 50% of standard lifetime allowance;

(b) benefit crystallisation events and non-standard lifetime allowances;

(d) pension commencement lump sum: primary and enhanced protection provisions of Schedule 36;

(e) stand-alone lump sum.

(3) At the end insert—

24 Payment of lump sum or lump sum death benefit in relation to relevant benefit crystallisation event	24 Payment of lump sum or lump sum death benefit in relation to relevant benefit crystallisation event
In relation to a relevant benefit crystallisation event, the scheme pays— a lump sum to the member of the scheme in relation to whom the relevant benefit crystallisation event occurs, or a lump sum death benefit to a person in respect of the death of that member.	The information is— the member’s name and national insurance number, the nature and amount of the lump sum or lump sum death benefit giving rise to the relevant benefit crystallisation event, the date of the relevant benefit crystallisation event, confirmation of whether or not the payment of the lump sum or lump sum death benefit has resulted in the member’s lump sum allowance or lump sum and death benefit allowance being exceeded, so far as the payment of the lump sum or lump sum death benefit has resulted in the member’s lump sum allowance or lump sum and death benefit allowance being exceeded, confirmation that any amount of tax due on the excess as a result of the charge to tax on pension income under Part 9 of ITEPA 2003 has been paid, and each relevant reference number (if any).

24 Payment of lump sum or lump sum death benefit in relation to relevant benefit crystallisation event

In relation to a relevant benefit crystallisation event, the scheme pays— a lump sum to the member of the scheme in relation to whom the relevant benefit crystallisation event occurs, or a lump sum death benefit to a person in respect of the death of that member.

The information is— the member’s name and national insurance number, the nature and amount of the lump sum or lump sum death benefit giving rise to the relevant benefit crystallisation event, the date of the relevant benefit crystallisation event, confirmation of whether or not the payment of the lump sum or lump sum death benefit has resulted in the member’s lump sum allowance or lump sum and death benefit allowance being exceeded, so far as the payment of the lump sum or lump sum death benefit has resulted in the member’s lump sum allowance or lump sum and death benefit allowance being exceeded, confirmation that any amount of tax due on the excess as a result of the charge to tax on pension income under Part 9 of ITEPA 2003 has been paid, and each relevant reference number (if any).

107

(1) Regulation 7 (percentage of standard lifetime allowance expended on the happening of a benefit crystallisation event) is amended as follows.

(2) For the heading substitute “Relevant benefit crystallisation events: amount of member’s allowances expended”.

(3) For paragraphs (1) and (2) substitute—

(1) The amount of a member’s lump sum allowance or lump sum and death benefit allowance expended on the happening of a relevant benefit crystallisation event is the non-taxable amount in relation to the lump sum to which the member becomes entitled, or the lump sum death benefit which a person is paid in respect of the member.

(4) In paragraph (3)(a) omit “, (2A), (2B)”.

(5) For paragraph (4) substitute—

(4) The total amount of a member’s lump sum allowance or lump sum and death benefit allowance expended is the sum of the amounts calculated in accordance with paragraph (1) in respect of each relevant benefit crystallisation event that has occurred in relation to the member.

(6) After paragraph (4) insert—

(5) In this regulation “non-taxable amount”— (a) in relation to a member’s lump sum allowance, has the meaning given by section 637Q (6) of ITEPA 2003; (b) in relation to a member’s lump sum and death benefit allowance, has the meaning given by section 637S (6) of ITEPA 2003.

108

(1) Regulation 8 (death: provision of information by scheme administrator to personal representatives) is amended as follows.

(2) In paragraph (1) omit “, (2A), (2B)”.

(3) In paragraph (2)—

(a) for “percentage of standard lifetime allowance” substitute “amount of the member’s lump sum and death benefit allowance”;

(b) for “relevant lump sum death benefit” substitute “defined benefits lump sum death benefit or an uncrystallised funds lump sum death benefit”.

(4) Omit paragraphs (2A) and (2B).

(5) In paragraph (3)—

(a) in the words before sub-paragraph (a), for “percentage of standard lifetime allowance” substitute “amount of the member’s lump sum and death benefit allowance”;

(b) in sub-paragraph (a), in the words before paragraph (i), for “benefit crystallisation event” substitute “relevant benefit crystallisation event”;

(c) in sub-paragraph (b), in the words before paragraph (i), for “benefit crystallisation event” substitute “relevant benefit crystallisation event”;

(d) in the words after sub-paragraph (b)—

(i) for “percentage” substitute “amount”;

(ii) for “relevant lump sum death benefit” substitute “defined benefits lump sum death benefit or any uncrystallised funds lump sum death benefit”;

(iii) omit the words from “and any amount” to the end.

109

(1) Regulation 9 (death: provision of information by insurance company to personal representatives) is amended as follows.

(2) In paragraph (2)—

(a) in the words before sub-paragraph (a), for “percentage of standard lifetime allowance” substitute “amount of the member’s lump sum and death benefit allowance”;

(b) in sub-paragraph (a), in the words before paragraph (i), for “benefit crystallisation event” substitute “relevant benefit crystallisation event”;

(c) in sub-paragraph (b), in the words before paragraph (i), for “benefit crystallisation event” substitute “relevant benefit crystallisation event”.

110

(1) Regulation 10 (death: provision of information by personal representatives to the Commissioners for His Majesty’s Revenue and Customs) is amended as follows.

(2) In paragraph (1), in sub-paragraph (b)—

(a) omit “, or any benefit crystallisation event 5C or 5D,”;

(b) for “a lifetime allowance charge” substitute “the member’s lump sum and death benefit allowance being exceeded”.

(3) Omit paragraphs (1A) and (1B).

(4) In paragraph (2)—

(a) after paragraph (a) insert—

(aa) the name of each other pension scheme (if any) of which the deceased member was a member, and the name and address of the scheme administrator of each such scheme;

;

(b) in paragraph (b), after “name” insert “, date of birth, date of death and national insurance number”;

(ba) each relevant reference number (if any) in relation to the deceased member; (bb) the name, address, date of birth and national insurance number of the individual to whom the relevant lump sum death benefit is paid;

;

(d) in sub-paragraph (d), for “the chargeable amount in respect of which a lifetime allowance charge is payable” substitute “the amount by which the member’s lump sum and death benefit allowance is exceeded”.

(5) Omit paragraphs (2A) and (2B).

(6) In paragraphs (3) and (5) omit “, (1A) or (1B)”.

111

(1) Regulation 11 (information provided by member to scheme administrator: protections) is amended as follows.

(2) In the heading, for “enhanced lifetime allowance” substitute “enhanced allowances”.

(3) In paragraph (1)—

(a) in the words before paragraph (a), for “the member” substitute “a member”;

(b) in paragraph (a) omit “lifetime”;

(c) for the words after paragraph (d) substitute “the member must give to the scheme administrator the reference number issued by or on behalf of the Commissioners under any of the provisions mentioned in paragraph (1A) in respect of that entitlement.”

(4) After paragraph (1) insert—

(1A) The provisions are— (a) the Registered Pension Schemes (Enhancement of Allowances) Regulations 2006 (S.I. 2006/131); (b) the Registered Pension Schemes (Enhanced Allowances Transitional Protection) Regulations 2011 (S.I. 2011/1752); (c) the Registered Pension Schemes and Relieved Non-UK Pension Schemes (Enhanced Allowances Transitional Protection) (Notification) Regulations 2013 (S.I. 2013/1741); (d) Schedule 4 to the Finance Act 2016 (pensions: lump sum allowance and lump sum and death benefit allowance: transitional provision).

(5) In paragraph (2)(a), for “Lifetime Allowance” substitute “Enhanced Allowances”.

112

Omit regulation 11B (information provided by members to scheme administrators: pension commencement lump sums).

113

In regulation 11BA (information provided by members to scheme administrators: recognised transfers), in paragraph (2), after paragraph (ac) insert—

(ad) a statement of the nature and transferred value of any transfers that have previously been made in relation to the member— (i) from any registered pension scheme or relieved relevant non-UK scheme of which the member is, or was at any time after 6 April 2006, a member, and (ii) to a qualifying recognised overseas pension scheme.

114

In regulation 11BB (information provided by members to scheme administrators: overseas transfers), in paragraph (1)(b)—

(a) in paragraph (i), for “the” substitute “an”;

(b) in paragraph (ii)—

(i) for “required” substitute “excluded from the overseas transfer charge under section 244AC”;

(ii) omit the words from “to be” to the end.

115

Omit regulation 12 (information about scheme administrator’s liability for a lifetime allowance charge).

116

(1) Regulation 12A (provision of information about liability for overseas transfer charge) is amended as follows.

(2) In the heading, at the end insert “etc”.

(3) In paragraph (1)—

(a) in the words before sub-paragraph (a), for “the overseas transfer charge” substitute “an overseas transfer charge”;

(b) for sub-paragraph (b) substitute—

(b) whether the overseas transfer charge arises under section 244AC or 244IA in the case of the transfer,

(4) In paragraph (2)—

(a) in the words before sub-paragraph (a), after “the overseas transfer charge” insert “under section 244AC”;

(b) in sub-paragraph (b), at the end insert “under section 244AC”;

(ba) the transferred value of the transfer,

(5) In paragraph (3), in the words before sub-paragraph (a), for “overseas transfer charge” substitute “an overseas transfer charge under section 244AC”.

117

(1) Regulation 14 (information provided to members by scheme administrators about benefit crystallisation events) is amended as follows.

(2) In the heading, for “benefit crystallisation events” substitute “relevant benefit crystallisation events”.

(3) In paragraph (1)(b), for “benefit crystallisation event” substitute “relevant benefit crystallisation event”.

(4) In paragraph (2)(c) omit “(2A) or (2B)”.

(5) In paragraph (3)—

(a) in the words before sub-paragraph (a), for “percentage of standard lifetime allowance” substitute “amount of the member’s lump sum allowance, and the amount of the member’s lump sum and death benefit allowance,”;

(b) in sub-paragraph (a), for “benefit crystallisation events” substitute “relevant benefit crystallisation events”;

(c) in sub-paragraph (b), in the words before paragraph (i), for “benefit crystallisation event” substitute “relevant benefit crystallisation event”.

118

In regulation 14ZCA (further information provided by scheme administrators on recognised transfers to overseas schemes), in paragraph (2)—

(a) in sub-paragraph (a), for “the overseas transfer charge” substitute “an overseas transfer charge”;

(b) for sub-paragraph (b) substitute—

(b) in a case where an overseas transfer charge arose in the case of the transfer, stating— (i) the transferred value of the transfer, (ii) whether the charge arose under section 244AC or 244IA, and (iii) the amount of the charge, and (c) in a case where the transfer is excluded from the overseas transfer charge under section 244AC by or under any of sections 244B to 244H, the section under which it is so excluded.

119

(1) Regulation 15 (information between scheme administrators) is amended as follows.

(2) In paragraph (2)—

(a) in the words before paragraph (a), for “total percentage of the standard lifetime allowance” substitute “total amount of the member’s lump sum allowance, and the total amount of the member’s lump sum and death benefit allowance,”;

(b) in sub-paragraph (a), for “benefit crystallisation events” substitute “relevant benefit crystallisation events”;

(c) in sub-paragraph (b), in the words before paragraph (i), for “benefit crystallisation event” substitute “relevant benefit crystallisation event”.

120

(1) Regulation 16 (pensions and annuities in payment: information provided to and by insurance companies) is amended as follows.

(2) In paragraph (2), for “total percentage of standard lifetime allowance” substitute “total amount of the member’s lump sum allowance, and the total amount of the member’s lump sum and death benefit allowance,”.

(3) In paragraph (3), for “percentage of the standard lifetime allowance” substitute “total amount of the member’s lump sum allowance, and the total amount of the member’s lump sum and death benefit allowance,”.

(4) In paragraph (4)(a), for “benefit crystallisation event” substitute “relevant benefit crystallisation event”.

121

(1) Regulation 17 (payments to insurance companies from drawdown pension funds) is amended as follows.

(2) In paragraph (2), for “percentage of standard lifetime allowance” substitute “amount of the member’s lump sum allowance, and the amount of the member’s lump sum and death benefit allowance,”.

(3) In paragraph (3)—

(a) for “percentage of the standard lifetime allowance” substitute “amount of the member’s lump sum allowance, and the amount of the member’s lump sum and death benefit allowance,”;

(b) for “percentage expended” substitute “amount expended”.

(4) In paragraph (5)—

(a) in sub-paragraph (a)—

(i) in the words before paragraph (i), for “percentages of standard lifetime allowance” substitute “amounts of the member’s lump sum allowance, and the sum of the amounts of the member’s lump sum and death benefit allowance,”;

(ii) in paragraph (i), for “benefit crystallisation events” substitute “relevant benefit crystallisation events”;

(iii) in paragraph (ii), for “benefit crystallisation event” substitute “relevant benefit crystallisation event”;

(b) in sub-paragraph (b), in the words before paragraph (i), for “percentages of standard lifetime allowance” substitute “amounts of the member’s lump sum allowance, and the sum of the amounts of the member’s lump sum and death benefit allowance,”.

(5) In paragraph (7)—

(a) in sub-paragraph (a)—

(i) in the words before paragraph (i), for “percentages of standard lifetime allowance” substitute “amounts of the member’s lump sum allowance, and the sum of the amounts of the member’s lump sum and death benefit allowance,”;

(ii) in paragraph (i), for “benefit crystallisation events” substitute “relevant benefit crystallisation events”;

(iii) in paragraph (ii), for “benefit crystallisation events” substitute “relevant benefit crystallisation events”;

(b) in sub-paragraph (b), in the words before paragraph (i), for “percentages of standard lifetime allowance” substitute “amounts of the member’s lump sum allowance, and the sum of the amounts of the member’s lump sum and death benefit allowance,”.

122

Omit regulations 19 (lump sums to which paragraph 1B of Schedule 29 applies) and 20 (lump sums to which paragraph 1B of Schedule 29 fails to apply).

Amendments of the Registered Pension Schemes and Overseas Pension Schemes (Electronic Communication of Returns and Information) Regulations 2006

123

(1) The Registered Pension Schemes and Overseas Pension Schemes (Electronic Communication of Returns and Information) Regulations 2006 (S.I. 2006/570) are amended as follows.

(2) In regulation 2 (interpretation), in paragraph (2), for the entry for “the ELA regulations” substitute—

“the EA regulations” means the Pension Schemes (Enhanced Allowances) Regulations 2006 (S.I. 2006/131);

(3) In Schedule 2 (information which may be supplied either to or by HM Revenue & Customs by an approved method of electronic communications)—

(a) in the entry relating to an application under section 267 or 268 of FA 2004 omit paragraph (a) (which relates to an application under section 267 of that Act);

(b) in the entry relating to a notification by an individual under regulation 3, 4, 5, 6, 7 or 8 of the Pension Schemes (Enhanced Lifetime Allowance) Regulations 2006 (S.I. 2006/131) (“the 2006 regulations”), for “the ELA regulations” substitute “the EA regulations”;

(c) in the entry relating to a requirement by an individual under regulation 12 of the 2006 regulations, for “the ELA regulations” substitute “the EA regulations”;

(d) in the entry relating to a requirement by an individual under regulation 14 of the 2006 regulations, for “the ELA regulations” substitute “the EA regulations”;

(e) in the entry relating to a requirement by an individual under regulation 16 of the 2006 regulations, for “the ELA regulations” substitute “the EA regulations”;

(f) in the entry relating to a notice given by an individual under regulation 17 of the 2006 regulations, for “the ELA regulations” substitute “the EA regulations”;

(g) in the entry relating to a notice given by an individual under regulation 18 of the 2006 regulations, for “the ELA regulations” substitute “the EA regulations”;

(h) in the entry relating to a notice by His Majesty’s Revenue and Customs under regulation 24 of the 2006 regulations, for “the ELA regulations” substitute “the EA regulations”;

(i) in the entry relating to a certificate by His Majesty’s Revenue and Customs under the 2006 regulations, for “the ELA regulations” substitute “the EA regulations”;

(j) in the final entry, relating to a notice of appeal against the imposition of a penalty under certain provisions—

(i) in paragraph (e) omit “lifetime”;

(ii) in paragraph (f) omit “lifetime”;

(iii) in paragraph (g) omit “lifetime allowance”.

Part 6 — Commencement and transitional provision etc

Commencement

124

The amendments made by section 14 and this Schedule have effect for the tax year 2024-25 and subsequent tax years.

Availability of individual’s lump sum allowance

125

(1) This paragraph applies where—

(a) one or more benefit crystallisation events within the meaning of Part 4 of FA 2004 occurred in relation to an individual before 6 April 2024, ...

(b) a relevant benefit crystallisation event within the meaning of section 637Q of ITEPA 2003 (availability of individual’s lump sum allowance) occurs in relation to the individual on or after that date, and

(i) is not an individual to whom paragraph 12 of Schedule 36 to FA 2004 applies (enhanced protection), or

(ii) is such an individual and is not within paragraph 24(1) of Schedule 36 to FA 2004 (persons with lump sum protection).

(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3) The amount of the individual’s lump sum allowance that is available on the occurrence of the relevant benefit crystallisation event is—

(a) the amount of that allowance that is available in accordance with section 637Q of ITEPA 2003 on the occurrence of that event, less

(b) an amount equal to 25% of the individual’s lifetime allowance previously-used amount;

or, if that produces a negative result, nil.

(3A) Where—

(a) the individual is an individual to whom paragraph 7 of Schedule 36 to FA 2004 applies (primary protection),

(b) the individual is not within paragraph 24(1) of Schedule 36 to FA 2004 (persons with lump sum protection), and

sub-paragraph (3) has effect as if the amount determined under paragraph (b) of that sub-paragraph were £375,000.

(4) But sub-paragraph (3) does not apply if, on the occurrence of the relevant benefit crystallisation event, a transitional tax-free amount certificate is in force in relation to the individual.

(5) In such a case, the amount of the individual’s lump sum allowance that is available on the occurrence of the relevant benefit crystallisation event is—

(a) the amount of that allowance that is available in accordance with section 637Q of ITEPA 2003 on the occurrence of that event, less

(b) the individual’s lump sum transitional tax-free amount;

or, if that produces a negative result, nil.

(6) For provision about the meaning of expressions used in this paragraph, see paragraph 129.

Availability of individual’s lump sum and death benefit allowance

126

(1) This paragraph applies where—

(a) one or more benefit crystallisation events within the meaning of Part 4 of FA 2004 occurred in relation to an individual before 6 April 2024, ...

(b) a relevant benefit crystallisation event within the meaning of section 637S of ITEPA 2003 (availability of individual’s lump sum and death benefit allowance) occurs in relation to the individual on or after that date. , and

(c) at the time the relevant benefit crystallisation occurs, the individual is not an individual to whom paragraph 12 of Schedule 36 to FA 2004 applies (enhanced protection).

(2) Where the individual’s lifetime allowance previously-used amount is equal to or greater than the individual’s lifetime allowance, none of the individual’s lump sum and death benefit allowance is available on the occurrence of the relevant benefit crystallisation event.

(3) Otherwise, the amount of the individual’s lump sum and death benefit allowance that is available on the occurrence of the relevant benefit crystallisation event is—

(a) the amount of that allowance that is available in accordance with section 637S of ITEPA 2003 on the occurrence of that event, less

(b) an amount equal to the appropriate percentage of the individual’s lifetime allowance previously-used amount;

or, if that produces a negative result, nil.

(3A) Where—

(a) the individual is an individual to whom paragraph 7 of Schedule 36 to FA 2004 applies (primary protection),

(b) the individual is not within paragraph 24(1) of Schedule 36 to FA 2004 (persons with lump sum protection),

(d) 25% of the individual’s lifetime allowance previously-used amount is greater than £375,000,

sub-paragraph (3) has effect as if the amount determined under paragraph (b) of that sub-paragraph were £375,000.

(4) In sub-paragraphs (3) and (3A) “the appropriate percentage” means—

(a) 100% in a case in which—

(i) the individual becomes entitled to a serious ill-health lump sum before 6 April 2024 and is under the age of 75 at the time of the payment, or

(ii) the individual dies before 6 April 2024 under the age of 75 and the conditions in sub-paragraph (4A) are met;

(b) 25% in any other case.

(4A) The conditions mentioned in sub-paragraph (4)(a)(ii) are—

(a) that before 6 April 2024 a person is paid a defined benefits lump sum death benefit, or an uncrystallised funds lump sum death benefit, in respect of the individual,

(b) that the lump sum is paid before the end of the period of two years beginning with the day on which the scheme administrator of the scheme first knew of the individual’s death or (if earlier) the day on which the scheme administrator could first reasonably have been expected to have known of it, and

(5) But sub-paragraphs (2) to (4A) do not apply if, at the relevant time, a transitional tax-free amount certificate is in force in relation to the individual.

(6) In such a case, the amount of the individual’s lump sum and death benefit allowance that is available on the occurrence of the relevant benefit crystallisation event is—

(a) the amount of that allowance that is available in accordance with section 637S of ITEPA 2003 on the occurrence of that event, less

(b) the individual’s lump sum and death benefit transitional tax-free amount;

or, if that produces a negative result, nil.

(6A) In sub-paragraph (5) “the relevant time” means—

(a) if the relevant benefit crystallisation event is the individual becoming entitled to a relevant lump sum (within the meaning of section 637S of ITEPA 2003), the time at which the individual becomes so entitled;

(b) if the relevant benefit crystallisation event is a person being paid a relevant lump sum death benefit (within the meaning of section 637S of ITEPA 2003), the 31 October next following the end of the tax year in which the relevant lump sum death benefit is paid.

(7) For provision about the meaning of expressions used in this paragraph, see paragraph 129.

Transitional tax-free amount certificates

127

(1) A “transitional tax-free amount certificate” is a certificate relating to an individual that—

(a) is issued by a certification administrator, on an application made in accordance with this paragraph, and

(b) certifies that the certification administrator is satisfied as to—

(i) the amount of the individual’s lump sum transitional tax-free amount, and

(ii) the amount of the individual’s lump sum and death benefit transitional tax-free amount.

(2) An application for a certificate in relation to an individual—

(a) may be made by the individual or, if the individual is deceased, the individual’s personal representatives;

(b) may be made to any person who is a certification administrator in relation to the individual;

(c) must be accompanied by complete evidence as to the amount of the individual’s lump sum and death benefit transitional tax-free amount;

(d) may not be made after the individual becomes entitled to a relevant lump sum (within the meaning of section 637S of ITEPA 2003), and

(e) may not be made after the 31 October next following the end of the tax year in which a relevant lump sum death benefit (within the meaning of section 637S of ITEPA 2003) is paid in respect of the individual.

(3) The certification administrator to whom an application is made must, before the end of the period of three months beginning with the date on which the the application is received, determine the application by—

(a) issuing the applicant with a certificate, or

(b) notifying the applicant that the application is refused.

(4) A certificate must (in addition to certifying the matter mentioned in sub-paragraph (1)(b)) contain the following information—

(a) the individual’s name, address and national insurance number,

(b) the individual’s lifetime allowance previously-used amount expressed as a percentage of the standard lifetime allowance for the tax year 2023/24,

(c) the amount that the certification administrator is satisfied is the individual’s lump sum transitional tax-free amount, and

(d) the amount that the certification administrator is satisfied is the individual’s lump sum and death benefit transitional tax-free amount.

(5) A certificate may be in such form as the certification administrator may determine and may, in particular, be incorporated into any other document that is given to the applicant by the certification administrator.

(6) If at any time it appears to a person who is a certification administrator in relation to the individual that the amount specified on a certificate under sub-paragraph (4)(c) or (d) does not accurately reflect the individual’s lump sum transitional tax-free amount or (as the case may be) lump sum and death benefit transitional tax-free amount, they must cancel the certificate by giving notice of the cancellation to the applicant or, if the applicant is deceased, the applicant’s personal representatives.

(7) A certificate—

(a) comes into force when it is issued, and

(b) ceases to be in force on the giving of a notice under sub-paragraph (6).

(8) The Commissioners for His Majesty’s Revenue and Customs may by regulations—

(a) amend sub-paragraph (3) by substituting a different period for that for the time being specified there, or

(b) make further provision about transitional tax-free certificates.

(9) For provision about the meaning of expressions used in this paragraph, see paragraph 129.

(10) In the second column of the Table in section 98 of TMA 1970 (penalty for failure to give certificates etc), at the appropriate place insert—

Paragraph 127 of Schedule 9 to the Finance Act 2024

Provision of information by scheme administrators to members

128

(1) A reference in the Provision of Information Regulations to a relevant benefit crystallisation event is, in relation to times before 6 April 2024, a reference to a benefit crystallisation event within the meaning of Part 4 of FA 2004.

(2) Sub-paragraph (3) applies where—

(a) one or more benefit crystallisation events within the meaning of Part 4 of FA 2004 occurred in relation to a member of a registered pension scheme before 6 April 2024, and

(b) it is necessary for a certification administrator to determine, for the purposes of any provision of the Provision of Information Regulations as that provision has effect for the tax year 2024-25 or a subsequent tax year, the amount of the member’s lump sum allowance that has been expended by the events mentioned in paragraph (a).

(3) For those purposes, the amount of the member’s lump sum allowance that has been expended by the events mentioned in sub-paragraph (2)(a) is—

(a) if the certification conditions are met in relation to the determination, so much of the member’s lump sum transitional tax-free amount as is referable to those events;

(b) otherwise, an amount equal to 25% of so much of the member’s lifetime allowance previously-used amount as is referable to those events.

(4) Sub-paragraph (5) applies where—

(a) one or more benefit crystallisation events within the meaning of Part 4 of FA 2004 occurred in relation to a member of a registered pension scheme before 6 April 2024, and

(b) it is necessary to determine, for the purposes of any provision of the Provision of Information Regulations as it has effect for the tax year 2024-25 or a later tax year, the amount of the member’s lump sum and death benefit allowance that has been expended by the events mentioned in paragraph (a).

(5) For those purposes, the amount of the member’s lump sum and death benefit allowance that has been expended by the events mentioned in sub-paragraph (4)(a) is—

(a) if the certification conditions are met in relation to the determination, so much of the member’s lump sum and death benefit transitional tax-free amount as is referable to those events;

(b) otherwise, an amount equal to the appropriate percentage of so much of the member’s lifetime allowance previously-used amount as is referable to those events.

(6) In sub-paragraph (5)(b) “the appropriate percentage” means—

(a) 100% in a case in which—

(zi) the amount of the member’s lifetime allowance previously-used amount is equal to or greater than the member’s lifetime allowance,

(i) the member becomes entitled to a serious ill-health lump sum under the scheme before 6 April 2024 and is under the age of 75 at the time of the payment, or

(ii) the member dies before 6 April 2024 under the age of 75 and the conditions in sub-paragraph (6A) are met,

(b) 25% in any other case.

(6A) The conditions mentioned in sub-paragraph (6)(a)(ii) are—

(a) that before 6 April 2024 a person is paid a defined benefits lump sum death benefit, or an uncrystallised funds lump sum death benefit, under the scheme in respect of the member,

(b) that the lump sum is paid before the end of the period of two years beginning with the day on which the scheme administrator of the scheme first knew of the individual’s death or (if earlier) the day on which the scheme administrator could first reasonably have been expected to have known of it, and

(6B) In this paragraph “the certification conditions”, in relation to a determination mentioned in sub-paragraph (2)(b) or (4)(b), means the following conditions—

(a) that either—

(i) the certification administrator making the determination has issued a transitional tax-free amount certificate to the member, or

(ii) the member has provided that certification administrator with a copy of a transitional tax-free amount certificate issued to the member by another certification administrator, and

(b) that the certification administrator making the determination—

(i) has not cancelled the certificate, and

(ii) has not been notified that the certificate has been cancelled by another certification administrator.

(7) In this paragraph “the Provision of Information Regulations” means the Registered Pension Schemes (Provision of Information) Regulations (S.I. 2006/567).

(8) For further provision about the meaning of expressions used in this paragraph, see paragraph 129.

Paragraphs 125 to 128: interpretation

129

(1) “Lump sum transitional tax-free amount”, in relation to an individual, means the total of—

(a) each pension commencement lump sum (if any) to which the individual has, before 6 April 2024, become entitled under a registered pension scheme, ...

(b) each uncrystallised funds pension lump sum (if any) to which the individual has, before 6 April 2024, become entitled under a registered pension scheme, so far as no charge to income tax under Part 9 of ITEPA 2003 or Part 4 of FA 2004 arises in respect of it.

(c) each stand-alone lump sum (if any) to which the individual has, before 6 April 2024, become entitled under a registered pension scheme, so far as no charge to income tax under Part 9 of ITEPA 2003 or Part 4 of FA 2004 arises in respect of it, and

(d) where a benefit crystallisation event within sub-paragraph (2)(a) of paragraph 20 of Schedule 36 to FA 2004 (pre-commencement pensions) was treated as having occurred before 6 April 2024 in relation to the individual, an amount equal to 25% of the amount treated as crystallised by that event under sub-paragraph (2)(b) of that paragraph.

(2) “Lump sum and death benefit transitional tax-free amount”, in relation to an individual, means the total of—

(za) the individual’s lump sum transitional tax-free amount,

(a) each relevant lump sum (if any) not comprised in the individual’s lump sum transitional tax-free amount to which the individual has, before 6 April 2024, become entitled under a registered pension scheme, so far as no charge to income tax under Part 9 of ITEPA 2003 or Part 4 of FA 2004 arises in respect of it, and

(b) each relevant lump sum death benefit (if any) paid before 6 April 2024 by a registered pension scheme in respect of the individual so far as no charge to income tax under Part 9 of ITEPA 2003 or Part 4 of FA 2004 arises in respect of it, ...

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

(a) a lump sum is “relevant” if the individual becoming entitled to it constituted a benefit crystallisation event within the meaning of Part 4 of FA 2004;

(b) a lump sum death benefit is “relevant” if its payment constituted a benefit crystallisation event within the meaning of Part 4 of FA 2004.

(4) “Complete evidence”, in relation to an individual’s lump sum and death benefit transitional tax-free amount, means evidence of—

(a) each lump sum (if any) to which the individual has become entitled, and

(b) each lump sum death benefit (if any) that has been paid in respect of the individual,

that is comprised, or any part of which is comprised, in the individual’s lump sum and death benefit transitional tax-free amount.

(4A) “Lifetime allowance previously-used amount”, in relation to an individual, means (subject to sub-paragraphs (4B) and (4C)) the amount that would have been the previously used amount for the purposes of section 219 of FA 2004 (availability of individual’s lifetime allowance) if a benefit crystallisation event (within the meaning of that section) had occurred in relation to the individual immediately before 6 April 2024.

(4B) Sub-paragraph (4C) applies where—

(a) the individual reached the age of 75 before 6 April 2024,

(b) on the individual reaching that age, an amount was, or amounts were, crystallised by one or more of benefit crystallisation events 5, 5A and 5B, and

(c) the individual did not become entitled to a lump sum under a registered pension scheme in the period beginning with the date on which the individual reached the age of 75 and ending with 5th April 2024.

(4C) The amount determined under sub-paragraph (4A) is to be reduced by the amount or (if more than one) the sum of the amounts mentioned in sub-paragraph (4B)(b).

(5) In paragraphs 125 to 128 and this paragraph—

“benefit crystallisation event”, followed by a number, has the same meaning as in Part 4 of FA 2004 (see section 216 of that Act);

“certification administrator”, in relation to an individual, means—the scheme administrator of a registered pension scheme of which the individual is a member or, if the individual is deceased, of which the individual was a member immediately before death, oran insurance company to which a registered pension scheme has transferred sums or assets to secure the payment to the individual of a scheme pension or a lifetime annuity;

“complete evidence” has the meaning given by sub-paragraph (4);

“defined benefits lump sum death benefit” has the same meaning as in Part 4 of FA 2004;

“drawdown pension fund”, in relation to an individual, has the same meaning as in Part 4 of FA 2004 (see Part 1 of Schedule 28 to that Act);

“entitled” (in relation to a lump sum) has the same meaning as in Part 4 of FA 2004;

“insurance company” has the same meaning as in Part 4 of FA 2004;

“lifetime allowance” has the same meaning as in Part 4 of FA 2004;

“lifetime allowance previously-used amount” has the meaning given by sub-paragraphs (4A) to (4C);

“lump sum and death benefit transitional tax-free amount” has the meaning given by sub-paragraphs (2) and (3);

“lump sum death benefit” has the same meaning as in Part 4 of FA 2004;

“lump sum transitional tax-free amount” has the meaning given by sub-paragraph (1);

“member” has the same meaning as in Part 4 of FA 2004;

“non-qualifying person” has the same meaning as in section 206 of FA 2004;

“pension commencement lump sum” has the same meaning as in Part 4 of FA 2004;

“the Provision of Information Regulations” means the Registered Pension Schemes (Provision of Information) Regulations (S.I. 2006/567);

“scheme administrator” has the same meaning as in Part 4 of FA 2004;

“serious ill-health lump sum” has the same meaning as in Part 4 of FA 2004;

“stand-alone lump sum” has the meaning given by article 25 of the Taxation of Pension Schemes (Transitional Provisions) Order 2006 (S.I. 2006/572);

“standard lifetime allowance”, in relation to an individual, has the same meaning as in Part 4 of FA 2004 as that Part has effect in relation to the individual;

“transitional tax-free amount certificate” means a certificate under paragraph 127;

“uncrystallised funds pension lump sum” has the same meaning as in Part 4 of FA 2004.

“uncrystallised funds pension lump sum death benefit” has the same meaning as in Part 4 of FA 2004;

(6) A reference in any of paragraphs 125 to 128 or this paragraph to a provision of FA 2004 is to that provision as it had effect immediately before 6 April 2024.

Statements for certain members who would not otherwise receive one in the tax year 2024-25

130

(1) The scheme administrator of a registered pension scheme must provide a statement to each relevant person before the end of the tax year 2024-25.

(2) In sub-paragraph (1) “relevant person” means—

(a) any member of the scheme—

(i) in relation to whom one or more benefit crystallisation events occurred before 6 April 2024, and

(ii) who on that date does not have an actual (as opposed to prospective) entitlement to be paid a pension, or

(b) the personal representatives of a member within paragraph (a) who has died.

(3) The statement must contain the information in regulation 14(3) of the Provision of Information Regulations (percentage of standard lifetime allowance expended by benefit crystallisation events) in respect of benefit crystallisation events occurring before 6 April 2024.

(4) In this paragraph—

“benefit crystallisation event” means a benefit crystallisation event within the meaning of Part 4 of FA 2004, as that Part had effect immediately before 6 April 2024;

“member” has the same meaning as in Part 4 of FA 2004;

“the Provision of Information Regulations” means the Registered Pension Schemes (Provision of Information) Regulations (S.I. 2006/567) , as those regulations had effect immediately before 6 April 2024;

“scheme administrator” has the same meaning as in Part 4 of FA 2004.

Lump sum death benefits paid on or after 6 April 2024 that crystallised before that date

131

(1) The amendments made by or under this Schedule, and the amendments made by section 14, are to be disregarded for the purposes of determining the tax treatment under Part 9 of ITEPA 2003 of a transitional lump sum death benefit.

(2) In section 637S (availability of individual’s lump sum and death benefit allowance), “relevant lump sum death benefit” does not include a transitional lump sum death benefit.

(3) In this paragraph “transitional lump sum death benefit” means a lump sum death benefit paid on or after 6 April 2024 so far as relating to rights that, before that date, crystallised under section 216 of FA 2004.

References in scheme rules to lifetime allowance excess lump sums

132

(1) A rule of a registered pension scheme relating to a member’s entitlement to , or to the payment of, a lifetime allowance excess lump sum has effect, in relation to entitlements arising on or after 6 April 2024, and so far as possible, as a rule relating to the member’s entitlement to , or to the payment of, a pension commencement excess lump sum.

(2) The amendments ... made by or under this Schedule , and the amendments made by section 14, do not affect the interpretation of any relevant rule of a registered pension scheme.

(3) For the purposes of sub-paragraph (2), a rule of a registered pension scheme is “relevant” if the rule imposes a limit on the amount of a benefit payable under the scheme to, or in respect of, a member by reference to the member’s lifetime allowance, the standard lifetime allowance or the lifetime allowance charge.

(4) In this paragraph “member”, “lifetime allowance”, “standard lifetime allowance” and “lifetime allowance charge” have the same meaning as in Part 4 of FA 2004 as that Part had effect immediately before 6 April 2024.

(5) This paragraph ceases to have effect at the end of the tax year 2028-29.

Power to make further transitional provision

133

(1) The Treasury may make transitional, transitory or saving provision (in addition to that contained in paragraphs 126 to 132) in connection with the coming into force of any amendment made by section 14 or this Schedule.

(2) Regulations under this paragraph may—

(a) insert provision into this Part of this Schedule;

(b) amend any provision of paragraphs 126 to 132;

Power to make further provision in connection with the abolition of lifetime allowance charge

134

(1) The Treasury may by regulations make further provision (in addition to that contained in Parts 1 to 5 of this Schedule) in consequence of, or otherwise in connection with, the provision made by sections 18, 19 and 23 of F(No.2)A 2023.

(2) Regulations under this paragraph may—

(a) amend any provision of the Income Tax Acts (including any provision of, or amendment made by, this Schedule);

(b) if made after 5 April 2024, be made so as to have effect for the tax year in which they are made;

(d) include transitional, transitory or saving provision.

(3) Regulations under this paragraph that increase any person’s liability to tax may not be made unless a draft of the statutory instrument containing them has been laid before, and approved by a resolution of, the House of Commons.

(4) No regulations under this paragraph may be made after 5 April 2026.

(5) In sub-paragraph (2) “amend” includes repeal or revoke.

Schedule 10

Part 1 — Main provisions

Introduction of cash basis default

1

Chapter 3 of Part 2 of ITTOIA 2005 (trade profits: basic rules) is amended as follows.

2

After section 24 insert—

(24A) (1) The profits of a trade for a tax year must be calculated on the cash basis, unless— (a) the trade is an excluded trade in relation to the tax year (see section 25B), or (b) an election under section 25C (1) has effect in relation to the trade for the tax year. (2) In this Part— (a) references to calculating the profits of a trade on the cash basis are references to doing so in accordance with this section, and (b) references to a trade in relation to which the cash basis applies are to a trade the profits of which are required by virtue of subsection (1) to be calculated on the cash basis. (3) Chapter 3A contains provision about the calculation of profits on the cash basis and the application of the rest of this Part in relation to the cash basis. (4) Where the cash basis applies in relation to a trade, sections 27, 28 and 30 do not apply in relation to the calculation of the profits of the trade. (5) This section does not affect provisions of the Income Tax Acts relating to the calculation of the profits of Lloyd's underwriters.

3

In section 25 (generally accepted accounting practice)—

(a) in subsection (1), after “trade” insert “to which the cash basis does not apply”;

(b) omit subsection (3).

4

Omit section 25A (cash basis for small businesses).

5

Before section 26 insert—

(25C) (1) A person who is or has been carrying on a trade, other than an excluded trade, may elect for the profits of the trade to be calculated in accordance with generally accepted accounting practice (instead of on the cash basis). (2) An election made in relation to a trade under subsection (1) has effect— (a) for the tax year for which it is made, and (b) for every subsequent tax year (subject to subsection (3)). (3) An election made in relation to a trade under subsection (1) ceases to have effect if— (a) the trade is an excluded trade in relation to a tax year, or (b) the person who is or has been carrying on the trade, other than an excluded trade, elects to calculate its profits for a subsequent tax year on the cash basis. (4) Subsection (3) does not prevent an election being made under subsection (1) for any subsequent tax year. (5) For the meaning of “excluded trade”, see section 25B.

Removal of turnover restrictions etc

6

In Chapter 3A of Part 2 of ITTOIA 2005 (trade profits: cash basis) omit—

(a) section 31A (conditions to be met for profits to be calculated on cash basis) and the italic heading before it,

(b) section 31B (relevant maximum), and

Removal of interest payments restriction

7

In Part 2 of ITTOIA 2005—

(a) in Chapter 4 (trade profits: rules restricting deductions) omit section 51A (cash basis: interest payments on loans), and

(b) in Chapter 5 (trade profits: rules allowing deductions) omit section 57B (cash basis: interest payments on loans) and the italic heading before it.

Removal of loss restrictions

8

In ITA 2007—

(a) in Chapter 2 of Part 4 (loss relief: trade losses) omit section 74E (no relief where cash basis used to calculate losses) and the italic heading before it, and

(b) in Chapter 1 of Part 8 (relief for interest payments), in section 384B(1) (restriction on relief where cash basis applies)—

(i) for the words from “has made” to “profits of” substitute “carried on”;

(ii) for “carried on by the partnership” substitute “the profits of which”.

Part 2 — Minor and consequential amendments

Chapter 1 — Amendments of ITTOIA 2005

Other amendments of Chapter 3 of Part 2

9

Chapter 3 of Part 2 of ITTOIA 2005 (trade profits: basic rules) is amended as follows.

10

Before section 24 insert the following italic heading—

11

Before section 25C (inserted by paragraph 5 of this Schedule) insert —

(25B) (1) A trade is an excluded trade in relation to a tax year if the trade meets any of conditions A to G. (2) Condition A is that— (a) the person who is or has been carrying on the trade is a firm, and (b) one or more of the persons who have been partners in the firm at any time during the tax year was not an individual at that time. (3) Condition B is that the person who is or has been carrying on the trade was a limited liability partnership at any time during the tax year. (4) Condition C is that an election under Chapter 8 (trade profits: herd basis rules) has effect in relation to the trade for the tax year. (5) Condition D is that a claim under Chapter 16 (claim for averaging of fluctuating profits) has been made in relation to the trade for the tax year. (6) Condition E is that, at any time within the period of 7 years ending immediately before the tax year, the person who is or has been carrying on the trade obtained an allowance under Part 3A of CAA 2001 (business premises renovation allowances) in relation to the trade. (7) Condition F is that the trade is or was at any time during the tax year a mineral extraction trade within the meaning of Part 5 of CAA 2001 (see section 394(2) of that Act). (8) Condition G is that— (a) at any time before the beginning of the tax year the person who is or has been carrying on the trade obtained an allowance under Part 6 of CAA 2001 (research and development allowances) in respect of qualifying expenditure incurred by the person in relation to the trade, and (b) the person owns an asset representing the expenditure. In this subsection “qualifying expenditure” has the same meaning as in Part 6 of CAA 2001. (9) The Treasury may by regulations amend this section. (10) A statutory instrument containing regulations under subsection (9) that restricts the circumstances in which an election may be made under section 25C may not be made unless a draft of the instrument containing the regulations has been laid before, and approved by a resolution of, the House of Commons.

12

Before section 27 insert the following italic heading—

13

Before section 30 insert the following italic heading—

14

Before section 31 insert the following italic heading—

Amendments of other provisions

15

ITTOIA 2005 is amended as follows.

16

Omit section 31C (excluded persons) (but see paragraph 11, which inserts substantially similar provision).

17

In section 32A (application of Chapter 4 of Part 2 to the cash basis), in subsection (2)—

(a) omit “the following—”, and

(b) omit the words from “section 51A” to the end.

18

In section 56A (application of Chapter 5 of Part 2 to the cash basis), omit subsection (2).

19

In section 58 (incidental costs of obtaining finance), in subsection (5) omit paragraph (a) (including the “and” at the end).

20

In section 94E (excluded vehicles), in subsection (3)(b), for “25A” substitute “24A”.

21

(1) Section 96A (capital receipts under, or after leaving, cash basis) is amended as follows.

(2) In subsection (3), for “an election under section 25A (cash basis for trades) has effect” substitute “the cash basis applies”.

(3) In subsection (3A), in paragraph (b), for the words “for which no election under section 25A had effect” substitute “in which the cash basis did not apply”.

(4) In subsection (3C)—

(a) in paragraph (a), for “no election under section 25A has effect” substitute “the cash basis does not apply”;

(b) in paragraph (b), for “such an election had had effect” substitute “the cash basis did apply”.

(5) In subsection (3D)—

(a) in paragraph (a), for “an election under section 25A had effect” substitute “the cash basis applied”;

(b) in paragraph (c), for “an election under section 25A had not had effect” substitute “the cash basis had not applied”.

(6) In subsection (3E), in paragraph (a), for “for which no election under section 25A had effect” substitute “in which the cash basis did not apply”.

22

Section 96B (section 96A: supplementary provision), in subsection (3)—

(a) in paragraph (a), for “an election under section 25A has effect” substitute “the cash basis applies”;

(b) in paragraph (b), for “no such election had effect” substitute “the cash basis did not apply”.

23

In section 97A (cash basis: value of trading stock on cessation of trade), in subsection (1)(b), for “an election under section 25A (cash basis for small business) has effect” substitute “the cash basis applies”.

24

In section 97B (cash basis: value of work in progress on cessation of profession or vocation), in subsection (1)(b), for “an election under section 25A (cash basis for small business) has effect” substitute “the cash basis applies”.

25

In section 227A (application of Chapter 17 of Part 2 where cash basis used), in subsection (1)—

(a) for paragraph (a) substitute—

(a) the cash basis does apply in relation to a trade for a tax year but does not apply in relation to the trade for the following tax year.

(b) for paragraph (b) substitute—

(b) the cash basis does not apply in relation to a trade for a tax year but does apply in relation to the trade for the following tax year.

26

In section 227B (cash basis treatment: full relief under Chapter 1 of Part 6A (trading allowance)), in subsection (2), for “an election under section 25A is to be treated as having effect” substitute “the cash basis is to be treated as not applying”.

27

In section 239A (spreading on leaving cash basis), in subsection (1)—

(a) in paragraph (a), for “an election under section 25A (cash basis for small businesses) has effect” substitute “the cash basis applies”;

(b) in paragraph (b), for “no such election has effect” substitute “the cash basis does not apply”.

28

In section 240B (meaning of “entering the cash basis”)—

(a) in paragraph (a), for “an election under section 25A has effect” substitute “the cash basis applies”;

(b) in paragraph (b), for “such an election does not have effect” substitute “the cash basis does not apply”.

29

In section 246 (basic meaning of “post-cessation receipt”), in subsection (2A), for “an election under section 25A (cash basis for small businesses) has effect” substitute “the cash basis applies”.

30

In section 254 (allowable deductions), for subsection (2A) substitute—

(2A) If, immediately before the person permanently ceases to carry on the trade, the cash basis applies in relation to the trade, assume for the purposes of subsection (2) that the cash basis applies in relation to the trade.

31

In section 783AE (full relief: introduction), in subsection (3)—

(a) for paragraph (a) substitute—

(a) the cash basis applies for the tax year in relation to one or more of the trades mentioned in subsection (2)(a);

;

(b) in paragraph (b)—

(i) for “25A” substitute “25C (1)”;

(ii) at the end insert “in relation to one or more of the trades mentioned in paragraph (a)”;

32

In section 786 (meaning of “rent-a-room receipts”), in subsection (5), for paragraph (b) substitute—

(b) the profits of the trade are required under section 24A to be calculated on the cash basis.

33

In section 805 (meaning of “qualifying care receipts”), in subsection (4), for paragraph (b) substitute—

(b) the profits of the trade are required under section 24A to be calculated on the cash basis.

34

In section 820 (periods of account not ending on 5 April), in subsection (2), for “an election under section 25A (cash basis for small businesses) has effect in relation to the trade” substitute “the profits of the trade are required under section 24A to be calculated on the cash basis”.

35

In Part 2 of Schedule 4 (index of defined expressions), in the entry for “the cash basis (in Part 2)”, for “section 25A” substitute “section 24A”.

Chapter 2 — Amendments of other Acts

TMA 1970

36

In section 42(7)(e) of TMA 1970 (procedure for making claims etc), for “25A” substitute “25C”.

TCGA 1992

37

In section 41(9)(a) of TCGA 1992 (restriction of losses by reference to capital allowances and renewals allowances), for the words from “calculating”, in the second place it occurs, to “effect” substitute “be construed in accordance with Part 2 of ITTOIA 2005 (see section 24A of that Act)”.

CAA 2001

38

CAA 2001 is amended as follows.

39

(1) Section 1A (capital allowances and charges: cash basis) is amended as follows.

(2) In subsection (9)—

(a) in paragraph (a), for “an election under section 25A of ITTOIA 2005 (cash basis for trades) has effect” substitute “the cash basis applies”;

(b) in paragraph (b), for “no such election has effect” substitute “the cash basis did not apply”.

(3) In subsection (11)—

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