Legalize / United Kingdom / Public General Act

Finance Act 2025

Type Public General Act

Publication 2025-03-20

State In force

Department Statute Law Database

Source legislation.gov.uk

articles Not indexed

(401ZA) (1) This section applies where— (a) there has been a disposal of ordinary share capital of a company (“C”) to the trustees of a settlement, (b) the relief requirements are met in relation to the disposal, (c) C has made a payment to the trustees that is a distribution to the trustees chargeable to income tax as a result of this Chapter or Chapter 4 (dividends from non-UK resident companies), and (d) the payment was made for the purposes of meeting the trustees’ acquisition costs. (2) On the making of a claim, so much of the trustees’ acquisition costs may be deducted from the distribution (whether chargeable under this Chapter or Chapter 4) as— (a) does not reduce the amount of the distribution below nil, and (b) has not been deducted from any other distribution. (3) The “relief requirements” means the requirements set out in section 236H(4) of TCGA 1992 (disposals to employee-ownership trusts), but those requirements have effect for the purposes of this section as if references to “P” were to the person making the disposal whether or not that person is a company. (4) For the purposes of this section, the trustees’ acquisition costs are sums expended by the trustees on— (a) the acquisition of ordinary share capital in C by the trustees that resulted from the disposal; (b) the repayment of any sums borrowed to fund that acquisition; (c) the payment of interest on any such sums or in respect of any deferral of consideration for the disposal to the extent the payment is not in respect of interest exceeding a reasonable commercial rate; (d) any valuation of C carried out in connection with the acquisition; (e) any liability to stamp duty or stamp duty reserve tax on the acquisition; (f) such other reasonable expenses as are directly connected with the acquisition (but this does not include any expenses incurred in connection with the ownership of the ordinary share capital once acquired).

(2) The amendment made by this paragraph has effect in relation to distributions made on or after 30 October 2024.

Schedule 7

Income tax

1

(1) Part 10A of ITA 2007 (alternative finance arrangements) is amended as follows.

(2) In section 564A (introduction), in subsection (3)(b) after “section 564D” insert “or 564DA”.

(3) In section 564D (diminishing shared ownership arrangements)—

(a) at the end of the heading insert “: initial acquisition”;

(b) for the “the first owner” (in each place it appears) substitute “the financier”;

(d) for “the first owner’s” (in each place it appears) substitute “the financier’s”;

(e) for “the eventual owner’s” (in each place it appears) substitute “the customer’s”;

(f) in subsection (1A)(d), for “those owners” substitute “the customer and the financier”;

(g) in subsection (6), for “564E” substitute “564DA”.

(4) After section 564D insert—

(564DA) (1) This section applies to arrangements if under them— (a) a person (“the customer”) has a beneficial interest in an asset, (b) the customer disposes of some or all of their beneficial interest in the asset to another person (“the financier”), (c) either— (i) the financier is a financial institution or a regulated home purchase plan provider (within the meaning of section 564D(7)), or (ii) the arrangements are regulated electronic system facilitated arrangements (within the meaning of section 564D(1A)), (d) the customer is to make payments to the financier amounting in aggregate to the consideration paid for the financier acquiring a beneficial interest as mentioned in paragraph (b) (but subject to any adjustment required for such a reduction as is mentioned in subsection (6)), (e) the customer is to acquire the financier’s beneficial interest (whether or not in stages) as a result of those payments, (f) the customer is to make other payments to the financier (whether under a lease forming part of the arrangements or otherwise), (g) the customer has the exclusive right to occupy or otherwise to use the asset, and (h) the customer is exclusively entitled to any income, profit or gain arising from or attributable to the asset (including, in particular, an increase in its value). (2) This section also applies to arrangements which supersede arrangements to which section 564D or subsection (1) of this section applies if under them— (a) a person (“the financier”) acquires so much of the beneficial interest in an asset mentioned in section 564D(1)(a) or subsection (1)(b) of this section as has not yet been acquired as mentioned in section 564D(1)(d) or subsection (1)(e) of this section, (b) either— (i) the financier is a financial institution or a regulated home purchase plan provider (within the meaning of section 564D(7)), or (ii) the arrangements are regulated electronic system facilitated arrangements (within the meaning of section 564D(1A)), (c) the customer mentioned in section 564D(1) or subsection (1) of this section is to make payments to the financier amounting in aggregate to so much of the payments mentioned in section 564D(1)(c) or subsection (1)(d) of this section as are yet to be paid (but subject to any adjustment required for such a reduction as is mentioned in subsection (6)), (d) that customer is to acquire the financier’s beneficial interest (whether or not in stages) as a result of those payments, (e) that customer is to make other payments to the financier (whether under a lease forming part of the arrangements or otherwise), (f) the customer has the exclusive right to occupy or otherwise to use the asset, and (g) the customer is exclusively entitled to any income, profit or gain arising from or attributable to that asset (including, in particular, an increase in its value). (3) For the purposes of subsections (1)(a) and (b) and (2)(a) it does not matter if— (a) another person who is not the customer or the financier also has a beneficial interest in the asset, or (b) the financier also has a legal interest in it. (4) Subsection (1)(g) or (2)(f) does not prevent the customer from granting an interest or right in relation to the asset if the conditions in subsection (5) are met. (5) The conditions are that— (a) the grant is not to— (i) the financier, (ii) a person controlled by the financier, or (iii) a person controlled by a person who also controls the financier, and (b) the grant is not required by the financier or arrangements to which the financier is a party. (6) Subsection (1)(h) or (2)(g) does not prevent the financier from— (a) having responsibility for any reduction in the asset’s value, or (b) having a share in a loss arising out of any such reduction. (7) This section is subject to section 564H (provision not at arm’s length: exclusion of arrangements from sections 564C and 564D, this section and sections 564E to 564G).

(5) In section 564K (alternative finance return resulting from diminishing shared ownership arrangements)—

(a) for “the eventual owner” (in each place it appears) substitute “the customer”;

(b) in subsection (2)—

(i) after “section 564D(1)(c)” insert “or 564DA (1)(d) or (2)(c)”;

(ii) for “the first owner” substitute “the financier”;

(iii) the “the first owner’s” substitute “the financier’s”;

(6) In section 564V (exclusion of some alternative finance return from sale consideration), in subsection (2), after “section 564D” insert “or 564DA”.

(7) After section 564W (diminishing shared ownership arrangements not partnerships) insert—

(564WA) (1) This section applies in respect of diminishing shared ownership arrangements to which 564DA applies. (2) If, under the arrangements, the customer disposes of an asset as mentioned in section 564DA (1)(b), any profit, gain or loss realised by the customer on the disposal of the asset is to be treated as not having been realised for income tax purposes. (3) If, under the arrangements, the customer— (a) disposes of an asset as mentioned in section 564DA (1)(b), (b) acquires the asset as mentioned in section 564DA (1)(d) and (e) or (2)(c) and (d), (c) and subsequently disposes of the asset, the disposal of the asset mentioned in paragraph (a) and the acquisition of the asset mentioned in paragraph (b) (together with any intervening disposals or acquisitions of the asset) are to be treated as not having occurred for the purpose of calculating, for income tax purposes, the amount of the profit, gain or loss realised by customer on the subsequent disposal of the asset. (4) In subsections (2) and (3), “the customer” has the same meaning as in section 564DA. (5) If, under arrangements to which section 564DA (2) applies (“successor arrangements”), the financier under the diminishing shared ownership arrangements that the successor arrangements supersede transfers their interest in a lease forming part of those arrangements to the financier under the successor arrangements, the transfer is not to be treated as involving a disposal or acquisition of the interest for income tax purposes.

Corporation tax

2

(1) Chapter 6 of Part 6 of CTA 2009 (alternative finance arrangements) is amended as follows.

(2) In section 501 (introduction), in subsection (3)(b) after “section 504” insert “or 504A”.

(3) In section 504 (diminishing shared ownership arrangements)—

(a) at the end of the heading insert “: initial acquisition”;

(b) for the “the first owner” (in each place it appears) substitute “the financier”;

(d) for “the first owner’s” (in each place it appears) substitute “the financier’s”;

(e) for “the eventual owner’s” (in each place it appears) substitute “the customer’s”;

(f) in subsection (1A)(d), for “those owners” substitute “the customer and the financier”;

(g) in subsection (6), for “505” substitute “504A”.

(4) After section 504 insert—

(504A) (1) This section applies to arrangements if under them— (a) a person (“the customer”) has a beneficial interest in an asset, (b) the customer disposes of some or all of their beneficial interest in the asset to another person (“the financier”), (c) either— (i) the financier is a financial institution or a regulated home purchase plan provider (within the meaning of section 504(7)), or (ii) the arrangements are regulated electronic system facilitated arrangements (within the meaning of section 504(1A)), (d) the customer is to make payments to the financier amounting in aggregate to the consideration paid for the financier acquiring a beneficial interest as mentioned in paragraph (b) (but subject to any adjustment required for such a reduction as is mentioned in subsection (6)), (e) the customer is to acquire the financier’s beneficial interest (whether or not in stages) as a result of those payments, (f) the customer is to make other payments to the financier (whether under a lease forming part of the arrangements or otherwise), (g) the customer has the exclusive right to occupy or otherwise to use the asset, and (h) the customer is exclusively entitled to any income, profit or gain arising from or attributable to the asset (including, in particular, an increase in its value). (2) This section also applies to arrangements which supersede arrangements to which section 504 or subsection (1) of this section applies if under them— (a) a person (“the financier”) acquires so much of the beneficial interest in an asset mentioned in section 504(1)(a) or subsection (1)(b) of this section as has not yet been acquired as mentioned in section 504(1)(d) or subsection (1)(e) of this section, (b) either— (i) the financier is a financial institution or a regulated home purchase plan provider (within the meaning of section 504(7)), or (ii) the arrangements are regulated electronic system facilitated arrangements (within the meaning of section 504(1A)), (c) the customer mentioned in section 504(1) or subsection (1) of this section is to make payments to the financier amounting in aggregate to so much of the payments mentioned in section 504(1)(c) or subsection (1)(d) of this section as are yet to be paid (but subject to any adjustment required for such a reduction as is mentioned in subsection (6)), (d) that customer is to acquire the financier’s beneficial interest (whether or not in stages) as a result of those payments, (e) that customer is to make other payments to the financier (whether under a lease forming part of the arrangements or otherwise), (f) the customer has the exclusive right to occupy or otherwise to use the asset, and (g) the customer is exclusively entitled to any income, profit or gain arising from or attributable to that asset (including, in particular, an increase in its value). (3) For the purposes of subsections (1)(a) and (b) and (2)(a) it does not matter if— (a) another person who is not the customer or the financier also has a beneficial interest in the asset, or (b) the financier also has a legal interest in it. (4) Subsection (1)(g) or (2)(f) does not prevent the customer from granting an interest or right in relation to the asset if the conditions in subsection (5) are met. (5) The conditions are that— (a) the grant is not to— (i) the financier, (ii) a person controlled by the financier, or (iii) a person controlled by a person who also controls the financier, and (b) the grant is not required by the financier or arrangements to which the financier is a party. (6) Subsection (1)(h) or (2)(g) does not prevent the financier from— (a) having responsibility for any reduction in the asset’s value, or (b) having a share in a loss arising out of any such reduction. (7) This section is subject to section 508 (provision not at arm’s length: exclusion of arrangements from sections 503 and 504, this section and sections 505 to 507).

(5) In section 510 (application of Part 5 of CTA 2009 to alternative finance arrangements)—

(a) in subsection (2)(a)—

(i) for “first owner” substitute “financier”;

(ii) for the “first owner’s” substitute “financier’s”;

(iii) for “eventual owner” substitute “customer”;

(b) in subsection (6)—

(i) omit the definitions of “the eventual owner” and “the first owner”;

(ii) before the definition of “the depositor” insert—

“the customer” has the same meaning as in section 504 (see subsection (1) of that section) or 504A (see subsection (1) or (2) of that section),

;

(iii) after the definition of “the depositor” insert—

“the financier” has the same meaning as in section 504 (see subsection (1) of that section) or 504A (see subsection (1) or (2) of that section),

(6) In section 512 (alternative finance return resulting from diminishing shared ownership arrangements)—

(a) for “the eventual owner” (in each place it appears) substitute “the customer”;

(b) in subsection (2)—

(i) after “section 504(1)(c)” insert “or 504A (1)(d) or (2)(c)”;

(ii) for “the first owner” substitute “the financier”;

(iii) the “the first owner’s” substitute “the financier’s”;

(7) In section 514 (exclusion of some alternative finance return from sale consideration), in subsection (2), after “section 504” insert “or 504A”.

(8) In section 515 (diminishing shared ownership arrangements not partnership)—

(a) in the heading, for “not partnerships” substitute “: further provision”;

(b) the existing text becomes subsection (1);

(2) If, under diminishing shared ownership arrangements, the financier grants a lease of the asset to the customer, the grant or termination of the lease is not to be treated as a disposal or acquisition of part of the asset for the purposes of the Corporation Tax Acts. (3) If, under diminishing shared ownership arrangements, the financier is entitled to the asset as a result of the customer breaching an obligation under the arrangements— (a) the financier’s dealings with the asset for the purpose of enforcing or giving effect to the entitlement, and (b) the dealings with the asset of any person appointed for that purpose, are to be treated for the purposes of the Corporation Tax Acts as if they were done through the financier, or (as the case may be) the appointed person, as nominee by the customer. (4) In this section— - “the asset” means the asset in which beneficial interest is acquired and disposed of under the diminishing shared ownership arrangements; - “the customer” and “the financier” have the same meaning as in section 504 or 504A; - “termination”, in relation to a lease, has the meaning given by section 70YI of CAA 2001.

(9) After section 515 (diminishing shared ownership arrangements not partnerships) insert—

(515A) (1) This section applies in respect of diminishing shared ownership arrangements to which section 504A applies. (2) If, under the arrangements, the customer disposes of an asset as mentioned in section 504A (1)(b), any gain accruing to the customer on the disposal of the asset is to be treated as not having accrued for the purposes of the Corporation Tax Acts. (3) If, under the arrangements, the customer— (a) disposes of an asset as mentioned in section 504A (1)(b), (b) acquires the asset as mentioned in section 504A (1)(d) and (e) or (2)(c) and (d), (c) and subsequently disposes of the asset, the disposal of the asset mentioned in paragraph (a) and the acquisition of the asset mentioned in paragraph (b) (together with any intervening disposals or acquisitions of the asset) are to be treated as not having occurred for the purpose of computing, for the purposes of the Corporation Tax Acts, the amount of the gain accruing to the customer on the subsequent disposal of the asset. (4) In subsections (2) and (3),”the customer” has the same meaning as in section 504A. (5) If, under arrangements to which section 504A (2) applies (“successor arrangements”), the financier under the diminishing shared ownership arrangements that the successor arrangements supersede transfers their interest in a lease forming part of those arrangements to the financier under the successor arrangements, the transfer is not to be treated as involving a disposal or acquisition of the interest for the purposes of the Corporation Tax Acts.

Capital gains tax

3

(1) Chapter 4 of Part 4 of the TCGA 1992 (alternative finance arrangements) is amended as follows.

(2) In section 151H (introduction), in subsection (3)(b) after “section 151K” insert “or 151KA”.

(3) In section 151K (diminishing shared ownership arrangements)—

(a) at the end of the heading insert “: initial acquisition”;

(b) for the “the first owner” (in each place it appears) substitute “the financier”;

(d) for “the first owner’s” (in each place it appears) substitute “the financier’s”;

(e) for “the eventual owner’s” (in each place it appears) substitute “the customer’s”;

(f) in subsection (1A)(d), for “those owners” substitute “the customer and the financier”;

(g) in subsection (7), for “151L” substitute “151KA”.

(4) After section 151K insert—

(151KA) (1) This section applies to arrangements if under them— (a) a person (“the customer”) has a beneficial interest in an asset, (b) the customer disposes of some or all of their beneficial interest in the asset to another person (“the financier”), (c) either— (i) the financier is a financial institution or a regulated home purchase plan provider (within the meaning of section 151K(7)), or (ii) the arrangements are regulated electronic system facilitated arrangements (within the meaning of section 151K(1A)), (d) the customer is to make payments to the financier amounting in aggregate to the consideration paid for the financier acquiring a beneficial interest as mentioned in paragraph (b) (but subject to any adjustment required for such a reduction as is mentioned in subsection (6)), (e) the customer is to acquire the financier’s beneficial interest (whether or not in stages) as a result of those payments, (f) the customer is to make other payments to the financier (whether under a lease forming part of the arrangements or otherwise), (g) the customer has the exclusive right to occupy or otherwise to use the asset, and (h) the customer is exclusively entitled to any income, profit or gain arising from or attributable to the asset (including, in particular, an increase in its value). (2) This section also applies to arrangements which supersede arrangements to which section 151K or subsection (1) of this section applies if under them— (a) a person (“the financier”) acquires so much of the beneficial interest in an asset mentioned in section 151K(1)(a) or subsection (1)(b) of this section as has not yet been acquired as mentioned in section 151K(1)(d) or subsection (1)(e) of this section, (b) either— (i) the financier is a financial institution or a regulated home purchase plan provider (within the meaning of section 151K(7)), or (ii) the arrangements are regulated electronic system facilitated arrangements (within the meaning of section 151K(1A)), (c) the customer mentioned in section 151K(1) or subsection (1) of this section is to make payments to the financier amounting in aggregate to so much of the payments mentioned in section 151K(1)(c) or subsection (1)(d) of this section as are yet to be paid (but subject to any adjustment required for such a reduction as is mentioned in subsection (6)), (d) that customer is to acquire the financier’s beneficial interest (whether or not in stages) as a result of those payments, (e) that customer is to make other payments to the financier (whether under a lease forming part of the arrangements or otherwise), (f) the customer has the exclusive right to occupy or otherwise to use the asset, and (g) the customer is exclusively entitled to any income, profit or gain arising from or attributable to that asset (including, in particular, an increase in its value). (3) For the purposes of subsections (1)(a) and (b) and (2)(a) it does not matter if— (a) another person who is not the customer or the financier also has a beneficial interest in the asset, or (b) the financier also has a legal interest in it. (4) Subsection (1)(g) or (2)(f) does not prevent the customer from granting an interest or right in relation to the asset if the conditions in subsection (5) are met. (5) The conditions are that— (a) the grant is not to— (i) the financier, (ii) a person controlled by the financier, or (iii) a person controlled by a person who also controls the financier, and (b) the grant is not required by the financier or arrangements to which the financier is a party. (6) Subsection (1)(h) or (2)(g) does not prevent the financier from— (a) having responsibility for any reduction in the asset’s value, or (b) having a share in a loss arising out of any such reduction. (7) Section 1124 of CTA 2010 (meaning of “control”) applies for the purposes of this section. (8) This section is subject to section 151O (provision not at arm’s length: exclusion of arrangements from sections 151J and 151K, this section and sections 151L to 151N).

(5) In section 151R (alternative finance return resulting from diminishing shared ownership arrangements)—

(a) for “the eventual owner” (in each place it appears) substitute “the customer”;

(b) in subsection (2)—

(i) after “section 151K(1)(c)” insert “or 151KA (1)(d) or (2)(c)”;

(ii) for “the first owner” substitute “the financier”;

(iii) the “the first owner’s” substitute “the financier’s”;

(6) In section 151X (exclusion of some alternative finance return from sale consideration), in subsection (2), after “section 151K” insert “or 151KA”.

(7) In section 151Y (diminishing shared ownership arrangements not partnership)—

(a) in the heading, for “not partnerships” substitute “: further provision”;

(b) the existing text becomes subsection (1);

(2) If, under diminishing shared ownership arrangements, the financier grants a lease of the asset to the customer, the grant or termination of the lease is not to be treated as a disposal or acquisition of part of the asset for the purposes of this Act so far as it applies for capital gains tax. (3) If, under diminishing shared ownership arrangements, the financier is entitled to the asset as a result of the customer breaching an obligation under the arrangements— (a) the financier’s dealings with the asset for the purpose of enforcing or giving effect to the entitlement, and (b) the dealings with the asset of any person appointed for that purpose, are to be treated for the purposes of this Act so far as it applies for capital gains tax as if they were done through the financier, or (as the case may be) the appointed person, as nominee by the customer. (4) In this section— - “the asset” means the asset in which beneficial interest is acquired and disposed of under the diminishing shared ownership arrangements; - “the customer” and “the financier” have the same meaning as in section 151K or 151KA; - “termination”, in relation to a lease, has the meaning given by section 70YI of CAA 2001.

(8) After section 151Y (diminishing shared ownership arrangements not partnerships) insert—

(151Z) (1) This section applies in respect of diminishing shared ownership arrangements to which section 151KA applies. (2) If, under the arrangements, the customer disposes of an asset as mentioned in section 151KA (1)(b), any gain accruing to the customer on the disposal of the asset is to be treated as not having accrued for the purposes of this Act so far as it applies for capital gains tax. (3) If, under the arrangements, the customer— (a) disposes of an asset as mentioned in section 151KA (1)(b), (b) acquires the asset as mentioned in section 151KA (1)(d) and (e) or (2)(c) and (d), (c) and subsequently disposes of the asset, the disposal of the asset mentioned in paragraph (a) and the acquisition of the asset mentioned in paragraph (b) (together with any intervening disposals or acquisitions of the asset) are to be treated as not having occurred for the purpose of computing, for the purposes of this Act so far as it applies for capital gains tax, the amount of the gain accruing to the customer on the subsequent disposal of the asset. (4) In subsections (2) and (3),”the customer” has the same meaning as in section 151KA. (5) If, under arrangements to which section 151KA (2) applies (“successor arrangements”), the financier under the diminishing shared ownership arrangements that the successor arrangements supersede transfers their interest in a lease forming part of those arrangements to the financier under the successor arrangements, the transfer is not to be treated as involving a disposal or acquisition of the interest for the purposes of this Act so far as it applies for capital gains tax.

Application

4

The amendments made by this Schedule have effect in relation to arrangements entered into on or after 30 October 2024.

Schedule 8

Part 1 — General consequential amendments

1

(1) ITEPA 2003 is amended as follows.

(2) In section 28 (meaning of “general earnings from overseas Crown employment subject to UK tax”), in subsection (2)(b), after “or of” insert “Wales, Scotland or”.

(3) In section 225 (payments for restrictive undertakings), for subsection (6) substitute—

(6) This section only applies where— (a) if there are general earnings from the employment that are earned in, or otherwise in respect of, the tax year mentioned in subsection (3), subsection (7) applies to any of those general earnings, or (b) it is reasonable to assume that, if there were such general earnings, subsection (7) would apply to any of those general earnings. (7) This subsection applies to general earnings if either— (a) section 15 applies to the general earnings and the general earnings are not— (i) qualifying foreign general earnings within the meaning of section 41U (qualifying foreign general earnings), or (ii) general earnings to which section 22 or section 26 would apply if the individual made a claim under section 809B of ITA 2007 (claim for the remittance basis) for the tax year mentioned in section 22(1) or 26(1) (being a tax year before tax year 2025-26), or (b) section 27 applies to the general earnings.

(4) In section 290E (calculation of earnings rate for a tax year), in subsection (4), for “non-domiciled”, in each place it occurs, substitute “non-resident or qualifying new resident”.

(5) In section 333 (scope of this chapter: expenses paid by the employee), in subsection (3)(b), for “non-domiciled” substitute “qualifying new resident”.

(6) In section 341 (travel at start or finish of overseas employment), in subsection (4), for the words from “domiciled” to the end substitute “not a qualifying new resident for the purposes of Chapter 5C of Part 2 of this Act or Chapter 5 of Part 8 of ITTOIA 2005 (see section 845B of that Act).”

(7) In section 342 (travel between employments where duties performed abroad), in subsection (7), for the words from “domiciled” to the end substitute “not a qualifying new resident for the purposes of Chapter 5C of Part 2 of this Act or Chapter 5 of Part 8 of ITTOIA 2005 (see section 845B of that Act).”

(8) In section 355 (deductions for corresponding payments by non-domiciled employees)—

(a) in the heading, for “non-domiciled” substitute “qualifying new resident”;

(b) in subsection (2), for the words from “not domiciled” to the end substitute “a qualifying new resident for the purposes of Chapter 5C of Part 2 of this Act or Chapter 5 of Part 8 of ITTOIA 2005 (see section 845B of that Act).”

(9) In section 360 (disallowance of certain accommodation expenses of MPs), in subsection (1), for “non-domiciled” substitute “non-resident or qualifying new resident”.

(10) In section 370 (travel costs and expenses where duties performed abroad), in subsection (6), for paragraph (b) substitute—

(b) either— (i) if the tax year is tax year 2024-2025 or an earlier tax year, would be taxable earnings under section 15 even if the employee made a claim under section 809B of ITA 2007 (claim for remittance basis) for that year, or (ii) if the tax year is tax year 2025-2026 or a later tax year and the employee is a qualifying new resident for the purposes of Chapter 5C of Part 2 for that tax year, are not qualifying foreign general earnings within the meaning of section 41U (qualifying foreign general earnings).

(11) In the italic heading before section 373 for “non-domiciled” substitute “non-resident or qualifying new resident”.

(12) In section 373 (employee’s travel costs and expenses where duties performed in UK)—

(a) in the heading, for “Non-domiciled” substitute “Non-resident or qualifying new resident”;

(b) in subsection (1) for “not domiciled in the United Kingdom” substitute “non-UK resident or a qualifying new resident for the purposes of Chapter 5C of Part 2 of this Act or Chapter 5 of Part 8 of ITTOIA 2005 (see section 845B of that Act)”;

(i) for “the country” substitute “a country”;

(ii) after “normally lives” insert “at the time the journey is made”;

(d) in subsection (4)(b), for “that”, in both places it occurs, substitute “such a”;

(e) omit subsection (7).

(13) In section 374 (spouse’s, civil partner’s or child’s travel costs and expenses where duties performed in UK)—

(a) in the heading, for “Non-domiciled” substitute “Non-resident or qualifying new resident”;

(b) in subsection (1) for “not domiciled in the United Kingdom” substitute “non-UK resident or a qualifying new resident for the purposes of Chapter 5C of Part 2 of this Act or Chapter 5 of Part 8 of ITTOIA 2005 (see section 845B of that Act)”;

(i) for “the country” substitute “a country”;

(ii) after “normally lives” insert “at the time the journey is made”;

(d) in subsection (5)(c)—

(i) for “the country” substitute “a country”;

(ii) after “normally lives” insert “at the time the journey is made”

(e) omit subsection (10).

(14) In section 376 (foreign accommodation and subsistence costs and expenses (overseas employments))—

(a) in subsection (1)(c), for “domiciled in the United Kingdom” substitute “not a qualifying new resident for the purposes of Chapter 5C of Part 2 of this Act or Chapter 5 of Part 8 of ITTOIA 2005 (see section 845B of that Act)”;

(b) omit subsection (6).

(15) In section 395C (meaning of “foreign service” in section 395B), for subsection (4) substitute—

(4) In subsection (2) “relevant earnings” means— (a) for service in or after the tax year 2025-26, earnings— (i) to which section 15 applies, and (ii) if the employee is a qualifying new resident for the purposes of Chapter 5C of Part 2 for that tax year, which are not qualifying foreign general earnings within the meaning of section 41U (qualifying foreign general earnings), and (b) for service before tax year 2025-26, earnings to which section 15 applies and to which that section would apply even if the employee made a claim under section 809B of ITA 2007 (claim for remittance basis) for that year.

(16) In section 413 (exception in certain cases of foreign service), for subsection (3ZA) substitute—

(3ZA) In subsection (2A)(a) “relevant earnings” means— (a) for service in or after the tax year 2025-26, earnings— (i) to which section 15 applies, and (ii) if the employee is a qualifying new resident for the purposes of Chapter 5C of Part 2 for that tax year, which are not qualifying foreign general earnings within the meaning of section 41U (qualifying foreign general earnings), and (b) for service before tax year 2025-26, earnings to which section 15 applies and to which that section would apply even if the employee made a claim under section 809B of ITA 2007 (claim for remittance basis) for that year.

2

(1) ITA 2007 is amended as follows.

(2) In section 24 (reliefs deductible at Step 2), in subsection (1)(a), after the entry for section 266(7) of ICTA insert—

section 41P of ITEPA 2003 (deduction for amount that reflects qualifying foreign employment income),

(3) In section 989 (the definitions), at the appropriate place insert—

“foreign employment election” means an election under section 41M of ITEPA 2003,

3

In Part 8 of Schedule 3 to the Social Security (Contributions) Regulations 2001 (S.I. 2001/1004), in paragraph 5 (travel costs and expenses where duties performed in the United Kingdom) —

(a) in the heading, for “non-domiciled” substitute “non-resident or qualifying new resident”;

(b) in paragraph (a), for “non-domiciled” substitute “non-resident or qualifying new resident”.

Part 2 — Consequential amendments relating to PAYE

4

After section 690C of ITEPA 2003 (employees who were internationally mobile etc. before 2025-2026) (as inserted by section 21 of this Act) insert—

(690D) (1) This section applies in relation to an employee if— (a) the employee is or is likely to be a qualifying new resident for a tax year (“the qualifying year”), and (b) the employee works or is likely to work outside the UK during the qualifying year. (2) The appropriate person may give a notice to an officer of Revenue and Customs at any time during the qualifying year— (a) that the employer is proposing to treat the foreign proportion of any qualifying payment made by the employer to the employee as not being PAYE income of the employee for the purposes of PAYE regulations, and (b) specifying that proportion. (3) For the purposes of this section and section 690E— (a) a “qualifying payment” means a payment of, or on account of, an amount of employment income of the employee that is likely to be qualifying employment income; (b) the “foreign proportion” of a qualifying payment is the proportion of the employment income that, on the basis of the best estimate that can reasonably be made, is likely to be qualifying foreign employment income. (4) If a notice given under this section has effect, the proportion of any qualifying payment made by the employer to the employee in any tax year which is to be treated for the purposes of PAYE regulations as not being a payment of PAYE income is the proportion specified in the notice. (5) A notice given under this section— (a) does not have effect if a direction has previously been given to the appropriate person under section 690E (direction by HMRC in relation to qualifying new residents) in relation to the employee and the qualifying year; (b) otherwise, has effect when it is acknowledged by an officer of Revenue and Customs. (6) A notice given under this section ceases to have effect if— (a) a direction under section 690E is given to the appropriate person in relation to the employee and the qualifying year, (b) a subsequent notice is given by the appropriate person under this section and is acknowledged by an officer of Revenue and Customs, or (c) a subsequent notice— (i) is given by the appropriate person under section 690A (employer notification for internationally mobile employee) on the basis that the employee is or is likely to be non-UK resident in the qualifying year, and (ii) is acknowledged by an officer of Revenue and Customs. (7) A notice given under this section must be in such manner and form, and contain such information, as may be specified in a general direction made by the Commissioners for His Majesty’s Revenue and Customs. (8) Subsection (4) is without prejudice to— (a) any assessment in respect of the income of the employee in question, and (b) any right to repayment of income tax and any relevant debts overpaid and any obligation to pay income tax underpaid and any relevant debts that remain wholly or partly unpaid. (9) For the purposes of this section and section 690E— (a) where an amount of employment income is treated as PAYE income paid by the employer for the purposes of PAYE regulations by virtue of section 687A or 695A (employment income under Part 7A) or section 696 (readily convertible assets), the employer is to be treated as making payment of that amount of employment income, and (b) “qualifying new resident”, “qualifying employment income” and “qualifying foreign employment income” have the same meaning as in Chapter 5C of Part 2 (relief for new residents on foreign employment income). (690E) (1) This section applies where— (a) a notice given during the qualifying year under section 690D has effect, and (b) it appears to an officer of Revenue and Customs that the proportion of any qualifying payment made by the employer to the employee that is treated as not being a payment of PAYE income for the purposes of PAYE regulations should not be the proportion specified in the notice. (2) An officer of Revenue and Customs may give a direction— (a) for determining a proportion of any qualifying payment made by the employer to the employee which is to be treated for the purposes of PAYE regulations as not being a payment of PAYE income, or (b) that any such payment is to be treated entirely as PAYE income for the purposes of PAYE regulations. (3) A direction under subsection (2)— (a) must specify the employee and the qualifying year, (b) must be given by notice to the appropriate person, and (c) may be varied by notice to the appropriate person from a day specified in the notice (which may not be earlier than 30 days from the date on which the notice is given). (4) If— (a) a direction under subsection (2) has effect, and (b) any qualifying payment is made by the employer to the employee in any tax year, the direction applies to the payment. (5) A direction under subsection (2) has effect when it is given. (6) A direction under subsection (2) ceases to have effect if a notice has subsequently been— (a) given by the appropriate person under section 690A (employer notification for internationally mobile employee) on the basis that the employee is or is likely to be non-UK resident for the qualifying year, and (b) acknowledged by an officer of Revenue and Customs. (7) Subsection (4) is without prejudice to— (a) any assessment in respect of the income of the employee in question, and (b) any right to repayment of income tax and any relevant debts overpaid and any obligation to pay income tax underpaid and any relevant debts that remain wholly or partly unpaid.

Part 3 — Transitional provision

Individuals no longer meeting section 26A requirement not qualifying new residents

5

(1) If an individual falling within sub-paragraph (2) would otherwise be a qualifying new resident for tax year 2025-26 for the purposes of Chapter 5C of Part 2 of ITEPA 2003 (relief for new residents on foreign employment income), the individual is to be treated as not being a qualifying new resident for that year for the purposes of that Chapter.

(2) An individual falls within this sub-paragraph if—

(a) the individual met the section 26A requirement for tax year 2022-23, and

(b) section 809B, 809D or 809E of ITA 2007 (remittance basis) applied to the individual for that year or for tax year 2023-24 or 2024-25.

Certain individuals meeting section 26A requirement treated as qualifying new residents

6

(1) If an individual falling within sub-paragraph (2)—

(a) meets the section 26A requirement for tax year 2025-26 or 2026-27, and

(b) is not a qualifying new resident for that year for the purposes of Chapter 5C of Part 2 of ITEPA 2003,

the individual is to be treated as a qualifying new resident for that tax year for the purposes of that Chapter.

(2) An individual falls within this sub-paragraph if—

(a) the individual met the section 26A requirement for tax year 2023-24 or tax year 2024-25, and

(b) section 809B, 809D or 809E of ITA 2007 (remittance basis) applied to the individual for that tax year.

Limit on relief not to apply to certain foreign employment relief claims

7

(1) Section 41R of ITEPA 2003 (limit on relief) does not apply to a foreign employment relief claim made by an individual for a tax year if the claim falls within sub-paragraph (2) or (3).

(2) A foreign employment relief claim made by an individual for a tax year falls within this sub-paragraph if—

(a) the qualifying year is tax year 2025-26 or 2026-27, and

(b) paragraph 6 (1) applies to the individual for that tax year.

(3) A foreign employment relief claim made by an individual for a tax year falls within this sub-paragraph if—

(a) the qualifying year is tax year 2025-26, 2026-27 or 2027-28,

(b) paragraph 6 (1) does not apply to the individual for that tax year,

(d) the individual meets the section 26A requirement for tax year 2025-26.

Definitions

8

For the purposes of this Part of this Schedule—

“foreign employment relief claim” and “qualifying year” have the same meanings as in Chapter 5C of Part 2 of ITEPA 2003 (relief for new residents on foreign employment income);

“the section 26A requirement” means the requirement of section 26A of ITEPA 2003 (requirement for 3-year period of non-residence).

Schedule 9

Part 1 — Remittance basis

No remittance basis for tax years after 2024-25

1

(1) Chapter A1 of Part 14 of ITA 2007 (remittance basis) is amended as follows.

(2) In section 809B (claim for remittance basis to apply), in subsection (1)—

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

(b) before that paragraph insert—

(za) the tax year is the tax year 2024-25 or an earlier tax year,

;

(3) In section 809C (claim for remittance basis by long-term UK resident), in subsection (1)—

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

(b) before that paragraph insert—

(za) the tax year is the tax year 2024-25 or an earlier tax year,

;

(4) In section 809D (application of remittance basis where income and gains under £2000) in subsection (1), before paragraph (a) insert—

(za) the tax year is the tax year 2024-25 or an earlier tax year,

(5) In section 809E (application of remittance basis without claim: other cases) in subsection (1), before paragraph (a) insert—

(za) the tax year is the tax year 2024-25 or an earlier tax year,

(6) In consequence of the amendments made by sub-paragraphs (2) to (5), in section 809A—

(a) for “are” substitute “were”;

(b) after “Kingdom” insert “in tax years before tax year 2025-26”.

Amendments of TCGA 1992 connected with end of remittance basis

2

(1) TCGA 1992 is amended as follows.

(2) In section 1A (territorial scope), in subsection (2)(a), for “applies” substitute “applied”.

(3) In section 1K (annual exempt amount), omit subsection (3).

(4) In the italic heading before section 3D, for “Non-UK domiciled individuals” substitute “Individuals who were non-UK domiciled”.

(5) In section 3D—

(a) for the heading, substitute “Individuals who were non-UK domiciled”;

(b) in subsection (1)—

(i) for “a tax year” substitute “tax year 2024-25 or an earlier tax year”;

(ii) for “is”, in each place it occurs, substitute “was”.

(6) Section 16ZA (losses: non-UK domiciled individuals) is omitted.

(7) In Schedule 1 (UK resident individuals not domiciled in UK)—

(a) in the heading, for “not domiciled in the UK” substitute “to whom the remittance basis applied”;

(b) in paragraph 1(1) for “applies” substitute “applied”;

Amendments of ITEPA 2003 connected with end of remittance basis

3

(1) ITEPA 2003 (employment income: charge to tax) is amended as follows.

(2) In section 6 (nature of charge to tax on employment income), in subsection (3)—

(a) in paragraph (a), omit “and domicile”;

(b) in paragraph (aa), for “applies” substitute “applied”.

(3) In section 20 (taxable earnings under this Chapter), for subsection (1) substitute—

(1) This Chapter contains provision for determining how much of the following are taxable earnings from an employment in a tax year— (a) general earnings that are for a tax year for which section 809B, 809D or 809E of ITA 2007 (remittance basis) applied to the employee (being a tax year before tax year 2025-26), and (b) general earnings that are for a tax year for which the employee is non-UK resident.

(4) In section 22 (chargeable overseas earnings for year when remittance basis applies and employee outside section 26)—

(a) in the heading and in subsection (1)(a), for “applies” substitute “applied”;

(b) in subsection (1)(b), for “does not” substitute “did not”.

(5) In section 23 (calculation of “chargeable overseas earnings”), in subsection (2)—

(a) in paragraph (a), for “applies” substitute “applied”;

(b) in paragraph (aa) for “does not” substitute “did not”;

(d) in paragraph (c) for “are” substitute “were”.

(6) In the italic heading before section 25, for “meet” substitute “met”.

(7) In section 26 (foreign earnings for year when remittance basis applies and employee meets section 26A requirement)—

(a) in the heading, for “applies and employee meets” substitute “applied and employee met”;

(b) in subsection (1), in the opening words—

(i) for “applies”, in the second place it appears, substitute “applied”;

(ii) for “meets” substitute “met”.

(8) In section 41F (taxable specific income: internationally mobile employee etc), in subsection (2)(a), for “applies” substitute “applied”.

(9) In section 41H (section 41F: chargeable and unchargeable foreign securities income)—

(a) in subsection (4)—

(i) in paragraph (a), for “applies” substitute “applied”;

(ii) in paragraph (b) for “does not” substitute “did not”;

(iii) in paragraph (c) for “is” substitute “was”;

(iv) in paragraph (d) for “are” substitute “were”;

(b) in subsection (7)—

(i) in paragraph (a), for “applies” substitute “applied”;

(ii) in paragraph (b) for “meets” substitute “met”;

(iii) in paragraph (c) for “are” substitute “were”.

(10) In section 271 (limited exemption of removal benefits and expenses: general)—

(a) in subsections (2)(a) and (2)(b), for “applies” substitute “applied”;

(b) in subsection (2)(b), for “meets” substitute “met”.

(11) In section 554Z9 (remittance basis: A does not meet section 26A requirement)—

(a) in the heading, for “does not” substitute “did not”;

(b) in subsection (1)—

(i) in paragraph (b) for “applies” substitute “applied”;

(ii) in paragraph (c) for “does not” substitute “did not”;

(iii) in paragraph (d) for “is” substitute “was”;

(iv) in paragraph (e), for “are” substitute “were”.

(12) In section 554Z10 (remittance basis: A meets section 26A requirement)—

(a) in the heading, for “meets” substitute “met”;

(b) in subsection (1)(b), for “applies” substitute “applied”;

(13) In section 576A (temporary non-residents), in subsection (5), for “applies” substitute “applied”.

(14) In section 698 (PAYE: special charges on employment-related securities), in subsection (8), for “remittance basis” substitute “internationally mobile employees”.

(15) In section 700 (PAYE: gains from securities options), in subsection (7), for “remittance basis” substitute “internationally mobile employees”.

(16) In section 700A (employment-related securities etc: remittance basis), in the heading, for “remittance basis” substitute “internationally mobile employees”.

Amendment of ITTOIA 2005 connected with end of remittance basis

4

In section 832 of ITTOIA 2005 (relevant foreign income charge on remittance basis), in subsection (1)—

(a) for “applies”, in the second place it appears, substitute” applied”;

(b) after “that year” insert “(being a tax year before tax year 2025-26)”.

When amounts will be remitted

5

(1) ITA 2007 is amended as follows.

(2) Section 809L (meaning of “remitted to the United Kingdom”) is amended in accordance with sub-paragraphs to (3) to (8).

(3) In subsection (2)—

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

(b) at the end of paragraph (b) insert

, or (c) money or other property is used outside the United Kingdom (directly or indirectly) for the benefit in the United Kingdom of a relevant person.

(4) In subsection (4)—

(a) in paragraph (a), for “is enjoyed by a relevant person” substitute

either— (i) the property is enjoyed by a relevant person, or (ii) as a result, a benefit is enjoyed by a relevant person.

;

(b) after paragraph (b) (but before the “or” at the end) insert—

(ba) is used outside the United Kingdom (directly or indirectly) and as a result a benefit is enjoyed in the United Kingdom by a relevant person,

(5) In subsection (5)—

(a) in paragraph (a), for “is enjoyed by a relevant person” substitute

either— (i) the property is enjoyed by a relevant person, or (ii) as a result, a benefit is enjoyed by a relevant person.

;

(b) after paragraph (b) (but before the “or” at the end) insert—

(ba) is used outside the United Kingdom (directly or indirectly) and as a result a benefit is enjoyed in the United Kingdom by a relevant person,

(6) In subsection (6)—

(a) for “or (b)”, in each place it occurs, substitute “, (b) or (ba)”;

(b) after “property”, in the second place it occurs, insert “, benefit”.

(7) At the end of subsection (9) insert “and cases where the property is used to secure the debt.”

(8) After subsection (9) insert—

(9A) For the purposes of this Chapter, any reference to property being brought to the United Kingdom includes— (a) sending, or otherwise effecting a transfer of, the property to the United Kingdom, and (b) in the case of intangible property, taking any steps, or permitting steps to be taken, that would result in property situated outside the United Kingdom becoming situated in the United Kingdom. (9B) Sections 275 to 275C of TCGA 1992 (location of assets) apply for the purposes of subsection (9A)(b) as they apply for the purposes of TCGA 1992. (9C) But subsection (9B) does not apply where the intangible property is a debt other than a judgment debt.

(9) In section 809N (section 809L: gift recipients, qualifying property and enjoyment)—

(a) in subsection (7)(c), after “(b)” insert “, (ba)”;

(b) in subsection (9)—

(i) in the opening words, after “property” insert “, a benefit”;

(ii) in paragraph (a), at the beginning insert “in the case of enjoyment of property or a service,”;

(iii) after paragraph (a) insert—

(aa) in the case of enjoyment of a benefit— (i) if the qualifying property being dealt with as mentioned in section 809L(4)(a) or (ba) results in a benefit being enjoyed by relevant persons and persons who are not relevant persons, and (ii) the enjoyment by all relevant persons is no more than negligible,

;

(iv) in paragraph (c), after “property” insert “, benefit”.

(10) In section 809O (section 809L: dealings where there is a connected operation)—

(a) in each of subsections (2), (3), (4) and (5) after “(b)” insert “, (ba)”;

(b) in subsection (6)—

(i) in the opening words, after “property” insert “, a benefit”;

(ii) in paragraph (a), at the beginning insert “in the case of enjoyment of property or a service,”;

(iii) after paragraph (a) insert—

(aa) in the case of enjoyment of a benefit— (i) if the property being dealt with as mentioned in section 809L(5)(a) or (ba) results in a benefit being enjoyed by relevant persons and persons who are not relevant persons, and (ii) the enjoyment by all relevant persons is no more than negligible,

;

(iv) in paragraph (c), after “property” insert “, benefit”.

(11) In section 809P (section 809L: amount remitted)—

(a) in subsections (6) and (8), for “or (b)” substitute “, (b) or (ba)”;

(b) in subsection (12), after “previously remitted”, in each place it occurs, insert “that has been charged to income tax or capital gains tax”.

Relief for amounts remitted again on becoming UK resident

6

(1) This paragraph applies where—

(a) income or chargeable gains of an individual have been remitted to the United Kingdom during a period that exceeds 5 years—

(i) that ends before 6 April 2024, and

(ii) in which there was no period for which the individual was UK resident, and

(b) after the end of that period, but before 6 April 2025—

(i) the same, or part of the same, income or chargeable gains (“the repeated remitted amount”) were again remitted to the United Kingdom, and

(ii) a relevant charge has arisen in relation to that remittance.

(2) A “relevant charge” in relation to a remittance means—

(a) income tax becoming chargeable on that remittance, or

(b) a gain accruing under paragraph 1(2) of Schedule 1 to TCGA 1992 on that remittance.

(3) Any relevant charge that has arisen on the first occasion on which the repeated remitted amount is remitted in circumstances falling within sub-paragraph (1)(b) is to be treated as never having arisen.

(4) But a remittance that is not charged to income tax or capital gains tax as a result of sub-paragraph (3) is to be treated as if it were charged to income tax or capital gains tax (as the case may be) for the purposes of section 809P(12) of ITA 2007.

(5) This paragraph is to be treated as never having applied where—

(a) for either, or each, of the tax years 2024-25 and 2025-26, the individual is not UK resident, or

(b) either, or each, of those tax years is a split year as respects the individual.

(6) References in this paragraph to amounts being remitted to the United Kingdom are to be construed in accordance with Chapter A1 of Part 14 of ITA 2007 (see, in particular, sections 809L to 809O of that Act).

Part 2 — Removal of domicile (primary legislation)

Removal of exemption for persons not domiciled in United Kingdom

7

(1) Chapter 1A of Part 14 of ITA 2007 (exemption for persons not domiciled in United Kingdom) is repealed.

Transferable tax allowance for married couples etc

8

In section 55C of ITA 2007 (election to reduce personal allowance), in subsection (3)(b), for “domiciled in the United Kingdom” substitute “not a qualifying new resident”.

Residence of personal representatives: domicile of deceased no longer relevant

9

(1) Section 834 of ITA 2007 (residence of personal representatives) is amended as follows.

(2) In subsection (3), for “domiciled in the United Kingdom” substitute “a long-term UK resident within the meaning of IHTA 1984”.

(3) Omit subsection (5).

10

In section 62 of TCGA 1992 (residence of personal representatives), in subsection (3), for the words from “having” to the end substitute “UK resident if the deceased was UK resident or a long-term UK resident within the meaning of IHTA 1984 at the date of death.”

Residence of trustees: domicile of settlor no longer relevant

11

(1) Section 476 of ITA 2007 (residence of trustees: how to work out if settlor meets condition C) is amended as follows.

(2) In subsections (2)(b) and (3)(b), omit “or domiciled in the United Kingdom”.

(3) After subsection (3) insert—

(3ZA) In relation to a settlement— (a) that arose before 6 April 2025 on S’s death, or (b) that S made (or is treated for the purposes of the Income Tax Acts as having made) before 6 April 2025, subsections (2)(b) and (3)(b) have effect as if after “UK resident” there were inserted “or domiciled in the United Kingdom”.

(4) In subsection (3A), for “subsections (2)(b) and (3)(b)” substitute “subsection (3ZA)”.

(5) In subsection (4)(c), for “subsection (2) or (3) or this subsection” substitute “this section”.

12

(1) Section 69 of TCGA 1992 (trustees of settlements) is amended as follows.

(2) In subsection (2B)(c), omit “or domiciled”.

(3) After subsection (2C) insert—

(2CA) In relation to a settlement— (a) that arose before 6 April 2025 on the settlor’s death, or (b) that the settlor made (or was treated for the purposes of this Act as making) before 6 April 2025, subsection (2B)(c) has effect as if after “resident” there were inserted “or domiciled”.

(4) In subsection (2F), for “(2B)(c)” substitute “(2CA)”.

13

(1) In the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (S.I. 2017/692), regulation 42 (application of Part 5) is amended as follows.

(2) In paragraph (2)(d)(ii), omit “and domiciled”.

(3) After paragraph (2) insert—

(2A) In relation to a trust that was set up before 6 April 2025, paragraph (2)(d)(ii) has effect as if after “resident” there were inserted “and domiciled”.

Application of Income Tax Acts in relation to deemed employment

14

In sections 56, 61G and 61R of ITEPA 2003 (chargeability to tax in respect of deemed employment payment), omit subsections (4) and (5).

Pension schemes

15

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

(2) In Chapter 3 (payments by registered pension schemes), in section 185G, in subsection (3)(a) omit “and domiciled”.

(3) In the following provisions of Chapter 5 (registered pension schemes: tax charges) and Chapter 6 (schemes that are not registered pension schemes) omit “or domiciled”—

(a) section 205(3);

(b) section 206(3);

(d) section 208(4);

(e) section 209(5);

(f) section 237A(2);

(g) section 237B(8);

(h) section 239(4);

(i) section 242(3);

(j) section 244J(6).

16

In section 7 of F(No.2)A 2005 (social security pension lump sum), in subsection (3) omit “or domiciled”.

Domicile of overseas electors

17

In FA 1996 omit section 200 (domicile for tax purposes of overseas electors).

18

In ITA 2007 omit section 835B (domicile for income tax purposes of overseas electors).

Situs of debt

19

(1) Section 275 of TCGA 1992 (location of assets) is amended as follows.

(2) In subsection (1), omit paragraph (l).

(3) Omit subsection (3A).

Trust reporting requirements

20

(1) Schedule 5A to TCGA 1992 (settlements with foreign element: information) is amended in accordance with sub-paragraphs (2) and (3).

(2) In paragraph 3—

(a) in sub-paragraph (3) omit “is domiciled in the United Kingdom and”;

(b) at the end of sub-paragraph (3) insert “and is not a qualifying new resident within the meaning of Schedule D1”;

(3) In paragraph 4—

(a) for sub-paragraph (2)(b) substitute—

(b) where that time was before 6 April 2025, did not fulfil the condition mentioned in sub-paragraph (3) below at that time or at any time before 6 April 2025, (ba) where that time was on or after 6 April 2025, does not fulfil the condition mentioned in sub-paragraph (3A) below at that time,

;

(b) in sub-paragraph (2)(c)—

(i) for “that condition” substitute “the condition mentioned in sub-paragraph (3A) below”;

(ii) for “the commencement day” substitute “6 April 2025”;

(c) in the closing words of sub-paragraph (2), for “the relevant day” substitute “31 January after the end of the tax year in which the relevant day falls”;

(d) after sub-paragraph (3) insert—

(3A) The condition is that the person concerned is resident in the United Kingdom and is not a qualifying new resident within the meaning of Schedule D1.

(4) Sub-paragraph (5) applies where a settlor fulfils the condition in paragraph 4(3A) of Schedule 5A to TCGA 1992 (settlements with foreign element: information) on 6 April 2025.

(5) For the purposes of paragraph 4(2)(c) of that Schedule, the settlor is to be treated as first fulfilling that condition on 6 April 2025.

Trusts with vulnerable beneficiary

21

(1) FA 2005 is amended as follows.

(2) In section 28 (vulnerable person’s liability: VQTI), in subsection (4)—

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

(b) omit paragraph (c) and the “and” before it.

(3) In Schedule 1 (non-UK resident vulnerable person), in paragraph 7(1)(a) omit “and domiciled”.

Disposals of deeply discounted securities

22

In section 459 of ITTOIA 2005 (application of transfer of assets abroad legislation to disposals of deeply discounted securities), in subsection (1) omit “or domiciled”.

The accrued income scheme

23

(1) ITA 2007 is amended as follows.

(2) In section 667 (trustees’ accrued income profits treated as settlement income), in subsection (2)—

(a) in paragraph (a) omit “or domiciled outside the United Kingdom”;

(b) in paragraph (b) omit “or domiciled in the United Kingdom”.

(3) In section 680 (interest on securities involving accrued income losses: foreign trustees), in subsection (1)—

(a) in paragraph (a) omit “or domiciled outside the United Kingdom”;

(b) in paragraph (d) omit “, or domiciled in the United Kingdom,”.

FOTRA securities

24

(1) In section 22 of F(No.2)A 1931 (Treasury power to issue securities with a FOTRA condition), in subsection (1)(b) for “neither domiciled nor” substitute “not”.

(2) In section 154 of FA 1996 (FOTRA securities), omit subsection (1).

(3) Any security issued with a FOTRA domicile condition is treated in relation to times on or after 6 April 2025 as if—

(a) it were a security issued with the post-1996 Act FOTRA conditions (and with no other FOTRA condition), and

(b) the post-1996 Act FOTRA conditions had been authorised in relation to the issue of that security by virtue of section 22 of F(No.2)A 1931.

(4) In sub-paragraph (3)—

“a FOTRA condition” means a condition about exemption from taxation authorised by section 22 of F(No.2)A 1931;

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