Finance Act 2019

• Citation: 2019 c. 1
• Sections: 627

Section 1 Income tax charge for tax year 2019-20

Income tax is charged for the tax year 2019-20.

Section 2 Corporation tax charge for financial year 2020

Corporation tax is charged for the financial year 2020.

Section 3 Main rates of income tax for tax year 2019-20

For the tax year 2019-20 the main rates of income tax are as follows—

(a) the basic rate is 20%;

(b) the higher rate is 40%;

(c) the additional rate is 45%.

Section 4 Default and savings rates of income tax for tax year 2019-20

(1) For the tax year 2019-20 the default rates of income tax are as follows—

(a) the default basic rate is 20%;

(b) the default higher rate is 40%;

(c) the default additional rate is 45%.

(2) For the tax year 2019-20 the savings rates of income tax are as follows—

(a) the savings basic rate is 20%;

(b) the savings higher rate is 40%;

(c) the savings additional rate is 45%.

Section 5 Basic rate limit and personal allowance

(1) For the tax years 2019-20 and 2020-21, the amount specified in section 10(5) of ITA 2007 (basic rate limit) is “£37,500”.

(2) For the tax years 2019-20 and 2020-21, the amount specified in section 35(1) of ITA 2007 (personal allowance) is “£12,500”.

(3) In consequence of the amendment made by subsection (2), omit section 4 of F(No.2)A 2015 (which has effect only if the personal allowance is less than £12,500).

(4) Omit the following (which relate to the link between the personal allowance and the national minimum wage)—

(a) sections 57(8), 57A and 1014(5)(b)(iia) of ITA 2007, and

(b) section 3 of F(No.2)A 2015.

(5) In consequence of the provision made by this section—

(a) section 21 of ITA 2007 (indexation of basic rate limit and starting rate limit for savings) does not apply in relation to the basic rate limit, and

(b) section 57 of ITA 2007 (indexation of allowances) does not apply in relation to the amount specified in section 35(1) of that Act,

for the tax years 2019-20 and 2020-21.

Section 6 Starting rate limit for savings for tax year 2019-20

Section 21 of ITA 2007 (indexation) does not apply in relation to the starting rate limit for savings for the tax year 2019-20 (so that the starting rate limit for savings remains at £5,000 for that tax year).

Section 7 Optional remuneration arrangements: arrangements for cars and vans

(1) ITEPA 2003 is amended as follows.

(2) In section 120A (optional remuneration arrangements: benefit of a car)—

(a) in subsection (3)(b), for the words from “the amount” to “year is” substitute “ the total foregone amount in connection with the car for the tax year is ” , and

(b) after subsection (3) insert—

(4) In this section, and in section 121A, the total foregone amount in connection with the car for a tax year is the total of—

(a) the amount foregone (see section 69B) with respect to the benefit of the car for that year, and

(b) the amount foregone (see section 69B) with respect to each other benefit that—

(i) is connected with the car,

(ii) is provided in that year for the employee, or a member of the employee's household, pursuant to optional remuneration arrangements, and

(iii) is neither the provision of a driver nor the provision of fuel.

(3) In section 121A (optional remuneration arrangements: method of calculating relevant amount)—

(a) in subsection (1), for step 1 substitute— “ Step 1 Take the total foregone amount in connection with the car for the tax year (see section 120A(4)). ” , and

(b) in subsection (2)—

(i) for “ “amount foregone” under” substitute “ “ total foregone amount ” for the purposes of ” , and

(ii) for “the benefit of the car” substitute “ a benefit mentioned in section 120A(4)(a) or (b) ” .

(4) In section 132A (capital contributions by employee: optional remuneration arrangements)—

(a) for subsection (3) substitute—

(3) The amount of the deduction allowed in any tax year is found by—

(a) first multiplying the capped amount by the appropriate percentage, and

(b) then multiplying the result by the availability factor.

(b) after subsection (4) insert—

(4A) For the purposes of subsection (3), “the availability factor” is given by the formula—

where—

Y is the number of days in the tax year, and

U is the number of days in the tax year on which the car is unavailable.

(4B) For the purposes of subsection (4A), the car is unavailable on any day if the day—

(a) falls before the first day on which the car is available to the employee,

(b) falls after the last day on which the car is available to the employee, or

(c) falls within a period of 30 days or more throughout which the car is not available to the employee.

(5) In section 154A (optional remuneration arrangements: benefit of a van)—

(a) in subsection (2)(b), for the words from “the amount” to “section 69B)” substitute “ the total foregone amount in connection with the van ” ,

(b) in subsection (3), for step 1 substitute— “ Step 1 Take the total foregone amount in connection with the van for the tax year. ” ,

(c) in subsection (7), for “the benefit of the van” substitute “ a benefit mentioned in subsection (8)(a) or (b) ” , and

(d) after subsection (7) insert—

(8) In this section the total foregone amount in connection with the van for a tax year is the total of—

(a) the amount foregone (see section 69B) with respect to the benefit of the van for that year, and

(b) the amount foregone (see section 69B) with respect to each other benefit that—

(i) is connected with the van,

(ii) is provided in that year for the employee, or a member of the employee's household, pursuant to optional remuneration arrangements, and

(iii) is neither the provision of a driver nor the provision of fuel.

(6) In section 239 (exemptions for payments and benefits relating to taxable cars, vans and exempt HGVs), in subsection (3)—

(a) after “by virtue of” insert “ section 120A (optional remuneration arrangements: benefit of a car), ” , and

(b) before “or section 160” insert “ , section 154A (optional remuneration arrangements: benefit of a van) ” .

(7) The amendments made by this section have effect for the tax year 2019-20 and subsequent tax years.

Section 8 Exemption for benefit in form of vehicle-battery charging at workplace

(1) In Chapter 3 of Part 4 of ITEPA 2003 (employment income: travel-related exemptions), after section 237 insert—

Vehicle-battery charging

(237A)

(1) No liability to income tax arises in respect of the provision, at or near an employee's workplace, of facilities for charging a battery of a vehicle used by the employee (including a vehicle used by the employee as a passenger).

(2) Subsection (1) applies only if the facilities are made available generally to the employer's employees at that workplace.

(3) In this section—

“facilities”—

includes electricity, but

does not include workplace parking,

“ taxable ”, in relation to a car or van, has the meaning given by section 239(6),

“ vehicle ” means a vehicle—

to which Chapter 2 applies (see section 235), and

which is neither a taxable car nor a taxable van, and

“ workplace parking ” has the meaning given by section 237(3).

(2) The amendment made by subsection (1) has effect for the tax year 2018-19 and subsequent tax years.

Section 9 Exemptions relating to emergency vehicles

(1) Section 248A of ITEPA 2003 (emergency vehicles) is amended in accordance with subsections (2) and (3).

(2) In subsection (1)—

(a) in paragraph (a), for “for the person's private use” substitute “ mainly for use for the person's business travel ” ;

(b) in paragraph (b), omit “engaged in on-call”.

(3) In subsection (8)—

(a) in the opening words, omit “engaged in on-call”;

(b) in paragraph (a), for “it” substitute “ the vehicle ” ;

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

(4) In section 205 of ITEPA 2003 (cost of the benefit: asset made available without transfer), after subsection (4) insert—

(5) Where the asset is an emergency vehicle, the expense of providing fuel for it in a tax year is not an additional expense by virtue of subsection (4) so long as—

(a) the person incurring that expense incurs no expense in that tax year in the provision of fuel for the vehicle which is used for the employee's private travel (“private fuel expense”), or

(b) all private fuel expense that the person does incur in that tax year is made good by the employee on or before 6 July following the tax year.

(6) For the purposes of this section—

“ emergency vehicle ” has the same meaning as in section 248A;

“ fuel ” includes electrical energy;

“ private travel ” means travelling the expenses of which, if incurred and paid by the employee, would not be deductible under Chapter 2 or 5 of Part 5.

(5) The amendments made by subsections (1) to (4) have effect for the tax year 2017-18 and subsequent tax years.

(6) For the tax year 2017-18, the tax year 2018-19 and the tax year 2019-20, sections 205 and 205A of ITEPA 2003 (taxable benefits: assets made available without transfer) have effect, where the asset mentioned in section 205(1)(a) is an emergency vehicle, with the modifications in subsections (7) and (8).

(7) Section 205(1C) has effect as if—

(a) in paragraph (a), at the beginning, there were inserted “the private use proportion of”;

(b) after paragraph (b), and on a new line, there were inserted—

The private use proportion is the proportion (by miles) of travel by the employee by the emergency vehicle in the tax year that is private travel.

(8) Section 205A(2) has effect as if paragraphs (c) and (d) were omitted.

(9) For the purposes of subsection (6), “ emergency vehicle ” has the same meaning as in section 248A of ITEPA 2003.

Section 10 Exemption for expenses related to travel

(1) Section 289A of ITEPA 2003 (exemption for paid or reimbursed expenses) is amended as follows.

(2) After subsection (2) insert—

(2A) No liability to income tax arises in respect of an amount paid or reimbursed by a person (“the payer”) to an employee (whether or not an employee of the payer) for expenses in the course of qualifying travel if—

(a) the amount has been calculated and paid or reimbursed in accordance with regulations made by the Commissioners for Her Majesty's Revenue and Customs,

(b) the payment or reimbursement is not provided pursuant to relevant salary sacrifice arrangements, and

(c) condition C is met.

(3) After subsection (4) insert—

(4A) Condition C is that—

(a) the payer or another person operates a system for checking that the employee has undertaken the qualifying travel in relation to which the amount is paid or reimbursed, and

(b) neither the payer nor any other person operating the system knows or suspects, or could reasonably be expected to know or suspect, that the travel was not undertaken.

(4) In subsection (5)—

(a) for “ “Relevant” substitute “In this section “relevant”, and

(b) before “in respect of” insert “ for or ” .

(5) After subsection (5) insert—

(5A) In this section “ qualifying travel ” means travel for which a deduction from the employee's earnings would be allowed under Chapter 2 or 5 of Part 5.

(6) In subsection (6), for “this section” substitute “ subsection (2) ” .

(7) In subsection (7), after “subsection” insert “ (2A)(a) or ” .

(8) After subsection (7) insert—

(8) Regulations made under subsection (2A)(a) may contain provision about calculating amounts that is framed by reference to rates (for expenses) published from time to time by the Commissioners for Her Majesty's Revenue and Customs.

(9) The amendments made by this section have effect for the tax year 2019-20 and subsequent tax years.

(10) For the tax year 2019-20 and subsequent tax years, the Income Tax (Approved Expenses) Regulations 2015 (S.I. 2015/1948)—

(a) have effect as if made under section 289A(2A)(a) of ITEPA 2003 (and may be revoked, or amended, accordingly), and

(b) have effect as if in regulation 2(1)—

(i) the reference to section 289A of ITEPA 2003 were to section 289A(2A)(a) of that Act,

(ii) for the words “in an approved way” there were substituted “ in accordance with these regulations ” , and

(iii) the words “purchased by the employee” were omitted.

Section 11 Beneficiaries of tax-exempt employer-provided pension benefits

(1) In section 307(2) of ITEPA 2003 (“death or retirement benefit” is a benefit for employee or others on employee's retirement or death), for “or a member of the employee's family or household” substitute “ , or paid or given in respect of the employee to any other individual or to a charity, ” .

(2) The amendment made by subsection (1) has effect for the tax year 2019-20 and subsequent tax years.

Section 12 Tax treatment of social security income

(1) Part 10 of ITEPA 2003 (social security income) is amended as follows.

(2) In Table A in section 660 (taxable UK benefits), at the appropriate place insert—

(3) In section 658 (amount charged to tax), in subsection (4), after “carer's allowance,” insert “ carer's allowance supplement, ” .

(4) In section 661 (taxable social security income), in subsection (1), after “carer's allowance,” insert “ carer's allowance supplement, ” .

(5) In Part 1 of Table B in section 677(1) (UK social security benefits wholly exempt from tax: benefits payable under primary legislation), insert each of the following at the appropriate place—

(6) In the heading of Part 1 of Table B in section 677(1), after “Northern Ireland welfare supplementary payments” insert “ etc ” .

(7) In Part 2 of Table B in section 677(1) (UK social security benefits wholly exempt from tax: benefits payable under regulations), insert each of the following at the appropriate place—

(8) In Part 1 of Schedule 1 to ITEPA 2003 (abbreviations of Acts and instruments), insert each of the following at the appropriate place—

Section 13 Disposals by non-UK residents etc

(1) Schedule 1 substitutes a new Part 1 of TCGA 1992 which—

(a) extends the cases in which gains accruing to persons not resident in the United Kingdom are chargeable to tax, and

(b) abolishes the specific charge to tax on ATED-related chargeable gains.

(2) Schedule 1 also—

(a) repeals other provisions contained in the previous version of Part 1 of TCGA 1992 or in Part 2 of that Act and restates their effect in rewritten form (whether in the new Part 1 or elsewhere),

(b) makes provision in relation to collective investment vehicles that (directly or indirectly) hold interests in land in the United Kingdom, and

(c) makes provision connected with the matters mentioned in subsection (1) or this subsection.

Section 14 Disposals of UK land etc: payments on account of capital gains tax

(1) Schedule 2 makes provision for the purposes of capital gains tax requiring returns, and payments on account of that tax, to be made where there is—

(a) any direct or indirect disposal of UK land which meets the non-residence condition (whether or not a gain accrues), or

(b) any other direct disposal of UK land on which a residential property gain accrues.

(2) Subsection (1) is to be read as if contained in Part 1 of that Schedule.

Section 15 Offshore receipts in respect of intangible property

Schedule 3 contains provision about offshore receipts in respect of intangible property.

Section 16 Avoidance involving profit fragmentation arrangements

Schedule 4 contains provision about profit fragmentation arrangements.

Section 17 Non-UK resident companies carrying on UK property businesses etc

Schedule 5 contains provision for non-UK resident companies to be chargeable to corporation tax on—

(a) profits of UK property businesses,

(b) profits consisting of other UK property income, and

(c) profits arising from certain loan relationships and derivative contracts.

Section 18 Diverted profits tax

Schedule 6 contains provision about diverted profits tax.

Section 19 Hybrid and other mismatches: scope of Chapter 8 and “financial instrument”

(1) Part 6A of TIOPA 2010 (hybrid and other mismatches) is amended as follows.

(2) In section 259HA (circumstances in which Chapter 8 applies)—

(a) for subsection (5) substitute—

(5) Condition C is that—

(a) the payer is within the charge to corporation tax for the payment period, or

(b) the multinational company—

(i) is UK resident for the payment period, and

(ii) under the law of the parent jurisdiction, is regarded as carrying on a business in the PE jurisdiction through a permanent establishment in that territory but, under the law of the PE jurisdiction, is not regarded as doing so.

(b) in subsection (9)(a), for “company” substitute “ payee ” .

(3) For section 259HC (counteraction of the multinational payee deduction/non-inclusion mismatch) substitute—

Counteraction of the multinational payee deduction/non-inclusion mismatch

(259HC) For corporation tax purposes—

(a) if paragraph (b) of Condition C in subsection (5) of section 259HA is met, an amount equal to the multinational payee deduction/non-inclusion mismatch mentioned in subsection (6) of that section is to be treated as income arising to the multinational company in the United Kingdom (and nowhere else) for the payment period, and

(b) in any other case, the relevant deduction that may be deducted from the payer's income for that period is to be reduced by that amount.

(4) In section 259N (meaning of “financial instrument”)—

(a) in subsection (3), for paragraph (b) substitute—

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

(b) omit subsection (4).

(5) The amendments made by subsections (2)(a) and (3) have effect in relation to—

(a) payments made on or after 1 January 2020, and

(b) quasi-payments in relation to which the payment period begins on or after that date.

(6) For the purposes of subsection (5)(b), where a payment period begins before 1 January 2020 and ends after that date (“the straddling period”)—

(a) so much of the straddling period as falls before that date, and so much of it as falls on or after that date, are to be treated as separate taxable periods, and

(b) if it is necessary to apportion an amount for the straddling period to the two separate taxable periods, it is to be apportioned—

(i) on a time basis according to the respective length of the separate taxable periods, or

(ii) if that would produce a result that is unjust or unreasonable, on a just and reasonable basis.

(7) The amendment made by subsection (2)(b) is to be regarded as always having had effect.

(8) The first regulations under section 259N(3)(b) may have effect in relation to times before they come into force, but not times before 1 January 2019.

(9) Until those regulations come into force section 259N continues to have effect (other than for the purposes of making those regulations) as if—

(a) the amendments made by subsection (4) had not been made, and

(b) the Taxation of Regulatory Capital Securities Regulations 2013 (S.I. 2013/3209) had not been revoked by paragraph 1 of Schedule 20 to this Act.

Section 20 Controlled foreign companies: finance company exemption and control

(1) Part 9A of TIOPA 2010 (controlled foreign companies) is amended as follows.

(2) In section 371IA (exemptions for profits from qualifying loan relationships), in subsection (4), for the words from “the profits” to the end substitute

so much of the profits of all its qualifying loan relationships taken together as are non-trading finance profits which—

(a) fall within section 371EC (capital investment from the UK), and

(b) do not fall within section 371EB (UK activities).

(3) In section 371RA (overview of Chapter 18), in subsection (2), for “Section 371RC sets” substitute “ Sections 371RC and 371RG set ” .

(4) After section 371RF insert—

Companies in which a UK resident company has more than a 50% investment

(371RG)

(1) If a UK resident company (whether alone or together with any associated enterprises) directly or indirectly has more than a 50% investment in a non-UK resident company, the non-UK resident company is to be taken to be a CFC (if it would not otherwise be).

(2) A person (“P”) is an “ associated enterprise ” in relation to a UK resident company if—

(a) P directly or indirectly has a 25% investment in the company (or vice versa), or

(b) another person directly or indirectly has a 25% investment in each of P and the company.

(3) Section 259ND (meaning of “ 50% investment ” and “ 25% investment ”) applies for the purposes of determining for the purposes of this section—

(a) whether a person has “more than a 50% investment” in another person, and

(b) whether a person has a “25% investment” in another person,

and, accordingly, references in section 259ND to “X%” are to be read as references to more than 50% or to 25% (as appropriate) and references in that section to “X% or more” are to be read as references to more than 50% or to 25% or more (as appropriate).

(5) The amendments made by this section have effect in relation to accounting periods of CFCs beginning on or after 1 January 2019.

(6) For the purposes of subsection (5), if a CFC has an accounting period beginning before, and ending on or after, that date (“the straddling period”)—

(a) so much of the straddling period as falls before that date, and so much of it as falls on or after that date, are treated as separate accounting periods, and

(b) if it is necessary to apportion an amount for the straddling period to the two separate periods, it is to be apportioned—

(i) on a time basis according to the respective length of the separate periods, or

(ii) if that would produce a result that is unjust or unreasonable, on a just and reasonable basis.

(7) In this section “ CFC ” has the same meaning as in Part 9A of TIOPA 2010.

Section 21 Permanent establishments: preparatory or auxiliary activities

(1) Section 1143 of CTA 2010 (permanent establishments: preparatory or auxiliary activities) is amended as follows.

(2) In subsection (2), at the end insert “ and are not part of a fragmented business operation ” .

(3) After subsection (2) insert—

(2A) Activities are “part of a fragmented business operation” if—

(a) they are carried on (whether at the same place or at different places in the same territory) by the company or a person closely related to the company,

(b) they constitute complementary functions that are part of a cohesive business operation, and

(c) subsection (2B) applies.

(2B) This subsection applies if—

(a) the overall activity resulting from the combination of the functions mentioned in subsection (2A)(b) is not activity that is only of a preparatory or auxiliary character, or

(b) the company or a person closely related to the company has a permanent establishment in the territory by reason of carrying on any of those functions.

(2C) A person who is not a company is to be treated for the purposes of subsection (2B)(b) as having a permanent establishment in a territory if, were the person a company, the person would have a permanent establishment in the territory.

(2D) For the purposes of this section, one person (“A”) is closely related to another person (“B”) if—

(a) A is able to secure that B acts in accordance with A's wishes (or vice versa),

(b) B can reasonably be expected to act, or typically acts, in accordance with A's wishes (or vice versa),

(c) a third person is able to secure that A and B act in accordance with the third person's wishes,

(d) A and B can reasonably be expected to act, or typically act, in accordance with a third person's wishes, or

(e) the 50% investment condition is met in relation to A and B.

(2E) The 50% investment condition is met in relation to A and B if—

(a) A has a 50% investment in B (or vice versa), or

(b) a third person has a 50% investment in each of A and B,

and section 259ND of TIOPA 2010 (meaning of “50% investment”) applies for the purposes of determining whether a person has a “50% investment

(4) In subsection (3), for “For this purpose” substitute “ In this section ” .

(5) The amendments made by this section have effect in relation to accounting periods beginning on or after 1 January 2019.

(6) For the purposes of subsection (5), if a company has an accounting period beginning before, and ending on or after, that date (“the straddling period”)—

(a) so much of the straddling period as falls before that date, and so much of it as falls on or after that date, are treated as separate accounting periods, and

(b) if it is necessary to apportion an amount for the straddling period to the two separate periods, it is to be apportioned—

(i) on a time basis according to the respective length of the separate periods, or

(ii) if that would produce a result that is unjust or unreasonable, on a just and reasonable basis.

Section 22 Payment of CGT exit charges

Schedule 7 contains provision about CGT exit charge payment plans.

Section 23 Corporation tax exit charges

Schedule 8—

(a) amends provisions concerning CT exit charge payment plans,

(b) repeals certain provisions that enable the postponement of exit charges, and

(c) contains amendments concerning the treatment of assets that are the subject of EU exit charges.

Section 24 Group relief etc: meaning of “UK related” company

(1) In section 134 of CTA 2010 (group relief: meaning of “UK related” company) in paragraph (b) for the words from “carrying on” to the end substitute “ within the charge to corporation tax ” .

(2) In section 188CJ of CTA 2010 (group relief for carried-forward losses: meaning of “UK related” company) in paragraph (b) for the words from “carrying on” to the end substitute “ within the charge to corporation tax ” .

(3) The amendments made by this section have effect for the purpose of determining whether a company is a UK related company at any time on or after 5 July 2016.

(4) In its application in relation to a claim for group relief or group relief for carried-forward losses made in reliance on this section, paragraph 74 of Schedule 18 to FA 1998 (time limit for claims) has effect as if the list of dates in sub-paragraph (1) of that paragraph included 31 December 2019.

Section 25 Intangible fixed assets: restrictions on goodwill and certain other assets

Schedule 9 contains provision about the debits to be brought into account for corporation tax purposes in respect of goodwill and certain other assets.

Section 26 Intangible fixed assets: exceptions to degrouping charges etc

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

(2) In section 780 (deemed realisation etc on company leaving group) in subsection (5) (exceptions) after paragraph (a) insert—

(aa) section 782A (company leaving group because of relevant share disposal),

(3) After section 782 insert—

Company leaving group because of relevant share disposal

(782A)

(1) Section 780 does not apply if a company ceases to be a member of a group because of a relevant disposal of shares by another company.

(2) A disposal of shares by a company is “relevant” if—

(a) the company would not be chargeable to corporation tax in respect of any gain accruing on the disposal by reason of the exemption conferred by paragraph 1 of Schedule 7AC to TCGA 1992 (assuming the company was within the charge to corporation tax), and

(b) the disposal is not part of an arrangement under which the recipient of the shares is to dispose of any of them to another person.

(3) For the purposes of subsection (2)(a) ignore paragraph 6 of Schedule 7AC to TCGA 1992 (cases in which exemptions do not apply).

(4) In section 785 (principal company becoming member of another group)—

(a) in subsection (2)(b) for the words from “both” to “effective 51%” substitute “ a relevant ” , and

(b) after subsection (2) insert—

(2A) For the purposes of subsection (2)(b) the transferee is a “relevant subsidiary” of a member of the second group (“A”) if, but for sections 767 to 770, the transferee would be a member of another group of which A would be the principal company.

(2B) Subsection (2) does not apply if the transferee ceases to meet the qualifying condition by reason of a relevant disposal of shares by another company (within the meaning given by section 782A(2)).

(5) The amendments made by this section have effect in relation to a company that ceases to be a member of a group or ceases to meet the condition in section 785(2)(b) of CTA 2009 (as amended by subsection (4)) on or after 7 November 2018.

(6) In its application in relation to a company that ceases to be a member of a group or ceases to meet the condition in section 785(2)(b) of CTA 2009 before 21 December 2018, section 782A of CTA 2009 has effect as if subsection (3) of that section was omitted.

Section 27 Corporation tax relief for carried-forward losses

Schedule 10 makes provision about corporation tax relief for losses and other amounts that are carried forward.

Section 28 Corporate interest restriction

Schedule 11 contains provision amending Part 10 of TIOPA 2010 (corporate interest restriction).

Section 29 Debtor relationships of company where money lent to connected companies

Schedule 12 makes provision for preventing a mismatch for corporation tax purposes in a case where—

(a) a company has a debtor relationship which is dealt with in its accounts on the basis of fair value accounting, and

(b) the money it receives under that relationship is wholly or mainly used to lend money to companies that are connected with it (and, accordingly, those creditor relationships are required to be dealt with for corporation tax purposes on an amortised cost basis of accounting).

Section 30 Construction expenditure on buildings and structures

(1) The Treasury may by regulations amend CAA 2001 so as to provide for allowances under that Act to be available where—

(a) expenditure has been incurred, on or after 29 October 2018, on the construction of a building,

(b) the building is in qualifying use, and

(c) the expenditure incurred on the construction of the building, or other expenditure, is qualifying expenditure.

(2) Regulations under this section (“ the regulations ”) must—

(a) specify what is qualifying use;

(b) specify what is qualifying expenditure;

(c) provide for a writing-down allowance to be available at an annual rate of 2% of the qualifying expenditure;

(d) specify the persons to whom allowances may be made;

(e) make provision about how effect is to be given to allowances.

(3) The regulations must secure that—

(a) allowances are not available for expenditure on the acquisition of land or rights in or over land;

(b) qualifying use is restricted to use for prescribed business purposes.

(4) The regulations may provide for allowances not to be available or to be restricted—

(a) in the case of a building that is wholly or partly used as a dwelling-house or for purposes that are ancillary to the purposes of a dwelling-house;

(b) in respect of a building that is used wholly or partly for holiday or overnight accommodation of a prescribed kind;

(c) in respect of a building that is only partly in qualifying use or in respect of periods when a building is not in qualifying use;

(d) in prescribed cases or circumstances.

(5) The regulations may provide that if a person incurs expenditure for the purposes of a qualifying activity before (but not more than 7 years before) the date on which the person starts to carry on that activity, the expenditure is to be treated as if it were incurred by the person on that date.

(6) The regulations may provide that if—

(a) allowances have been available to a person (A) in respect of expenditure on the construction of a building, and

(b) A sells A's interest in the building to another person (B),

allowances are available to B in respect of the residue of the qualifying expenditure.

(7) The regulations may make provision about leases, including provision for the grant of a lease to be treated in prescribed circumstances in the same way as the sale of the grantor's interest.

(8) The regulations may make—

(a) provision under which expenditure is apportioned;

(b) provision for balancing adjustments (and about how effect is to be given to them);

(c) provision for qualifying expenditure to be written off;

(d) special provision about highway undertakings;

(e) provision about additional VAT liability and additional VAT rebate (within the meaning given by section 547 of CAA 2001);

(f) anti-avoidance provision;

(g) supplementary or incidental provision;

(h) consequential provision (including provision amending enactments other than CAA 2001).

(9) The regulations may make transitional provision, including provision under which expenditure incurred on or after 29 October 2018 is treated as incurred before that date—

(a) where the expenditure is associated or connected with expenditure incurred before that date,

(b) where the expenditure relates to a contract entered into before that date, or

(c) in other prescribed cases.

(10) Subsections (2) to (9) are not to be read as limiting subsection (1).

(11) A statutory instrument containing the regulations may not be made unless a draft of the instrument has been laid before and approved by a resolution of the House of Commons.

(12) A reference in this section to expenditure on the construction of a building includes a reference to capital expenditure—

(a) on repairs to the building, or

(b) on the renovation or conversion of the building.

(13) In this section—

“ building ” includes structure;

“ dwelling-house ” has the meaning given by the regulations;

“ prescribed ” means prescribed by the regulations.

Section 31 Special rate expenditure on plant and machinery

(1) Part 2 of CAA 2001 (plant and machinery allowances) is amended as follows.

(2) In section 104D(1) (writing-down allowances in respect of special rate expenditure) for “8%” substitute “ 6% ” .

(3) Accordingly, in—

(a) section 56(2)(a),

(b) the heading of section 104D, and

(c) section 104E(1)(a),

for “8%” substitute “ 6% ” .

(4) The amendments made by subsections (2) and (3) have effect in relation to chargeable periods beginning on or after the relevant day.

(5) In relation to a chargeable period that begins before and ends on or after the relevant day, section 104D(1) of CAA 2001 has effect as if the reference to 8% was a reference to X%.

(6) For the purposes of subsection (5), X is—

where—

BRD is the number of days in the chargeable period before the relevant day,

ARD is the number of days in the chargeable period on or after the relevant day, and

CP is the number of days in the chargeable period.

(7) Where X would be a figure with more than 2 decimal places it is to be rounded up to the nearest second decimal place.

(8) In this section “the relevant day” is—

(a) for corporation tax purposes, 1 April 2019, and

(b) for income tax purposes, 6 April 2019.

Section 32 Temporary increase in annual investment allowance

(1) In relation to expenditure incurred during the period beginning with 1 January 2019 and ending with 31 March 2023 , section 51A of CAA 2001 (entitlement to annual investment allowance) has effect as if in subsection (5) the amount specified as the maximum allowance were £1,000,000.

(2) Schedule 13 contains provision about chargeable periods which straddle 1 January 2019 or 1 April 2023 .

Section 33 First-year allowances and first-year tax credits

(1) In Part 2 of CAA 2001 (plant and machinery allowances), the following provisions are repealed—

(a) sections 45A to 45C (energy-saving plant or machinery),

(b) sections 45H to 45J (environmentally beneficial plant or machinery), and

(c) section 262A and Schedule A1 (first-year tax credits).

(2) In consequence of subsection (1)—

(a) in TMA 1970, in the second column of the Table in section 98, in the entry relating to requirements imposed by provisions of CAA 2001, omit “45B(5) and (6),” and “, 45I(5) and (6)”,

(b) in CAA 2001—

(i) in section 2(3), for “262A” substitute “ 262 ” ,

(ii) in section 3—

(a) in subsection (1), omit “, and no first-year tax credit is to be paid under Schedule A1,”, and

(b) omit subsection (2B),

(iii) in the list in section 39, omit—

(a) the entry relating to section 45A, and

(b) the entry relating to section 45H,

(iv) in section 46—

(a) in the list in subsection (1), omit the entry relating to section 45A and the entry relating to section 45H, and

(b) omit subsections (5) and (6), and

(v) in the table in section 52(3), omit—

(a) the entry relating to expenditure qualifying under section 45A, and

(b) the entry relating to expenditure qualifying under section 45H, and

(c) the following provisions are repealed—

(i) in FA 2001, section 65 and Schedule 17,

(ii) in FA 2003, paragraphs 2(c), 3, 4(1)(c) and (2) and 5 to 7 of Schedule 30,

(iii) in FA 2006, paragraph 11 of Schedule 9,

(iv) in FA 2008, section 79 and Schedule 25,

(v) in CTA 2009, paragraph 521 of Schedule 1,

(vi) in CTA 2010, paragraph 364 of Schedule 1,

(vii) in FA 2011, paragraph 12(16) of Schedule 14,

(viii) in the Welfare Reform Act 2012—

(a) paragraph 14 of Schedule 3, and

(b) in the table in Part 1 of Schedule 14, the entry relating to CAA 2001,

(ix) in FA 2012—

(a) section 45(2) and (3), and

(b) paragraph 106 of Schedule 16,

(x) in FA 2013—

(a) section 67,

(b) section 68(2), and

(c) paragraph 6 of Schedule 18,

(xi) in FA 2014, paragraph 7 of Schedule 4,

(xii) in FA 2016, paragraph 7 of Schedule 8,

(xiii) in F(No.2)A 2017—

(a) paragraph 126 of Schedule 4, and

(b) paragraph 7 of Schedule 6, and

(xiv) in FA 2018, section 29.

(3) The following orders were made under powers contained in provisions repealed by subsection (1) and are therefore revoked—

(a) the Capital Allowances (Environmentally Beneficial Plant and Machinery) Order 2003 (S.I. 2003/2076), and

(b) any instrument amending that order.

(4) The Capital Allowances (Energy-saving Plant and Machinery) Order 2018 (S.I. 2018/268) is revoked.

(5) The amendments made by this section have effect in relation to expenditure incurred on or after—

(a) for corporation tax purposes, 1 April 2020, and

(b) for income tax purposes, 6 April 2020.

Section 34 First-year allowance: expenditure on electric vehicle charge points

In section 45EA of CAA 2001 (expenditure on plant or machinery for electric vehicle charging point), in subsection (3) (the relevant period) for “2019”, in both places it occurs, substitute “ 2023 ” .

Section 35 Qualifying expenditure: buildings, structures and land

(1) Chapter 3 of Part 2 of CAA 2001 (qualifying expenditure) is amended as follows.

(2) In each of sections 21 and 22 (buildings, structures, assets and works), at the end of subsection (4) insert “ (but any reference in list C in subsection (4) of that section to “ plant ” does not include anything where expenditure on its provision is excluded by this section) ” .

(3) The amendments made by this section—

(a) are treated as always having had effect, but

(b) do not have effect in relation to claims for capital allowances made before 29 October 2018.

Section 36 Changes to accounting standards etc

Schedule 14 contains provision relating to the taxation of leases.

Section 37 Oil activities: transferable tax history

Schedule 15 makes provision for a company which sells an interest in an oil licence and a company which buys that interest to make a joint election for an amount of the seller's profits to be treated, in accordance with the provisions of the Schedule, as if it were an amount of the purchaser's profits.

Section 38 Petroleum revenue tax: post-transfer decommissioning expenditure

(1) Schedule 3 to OTA 1975 (petroleum revenue tax: miscellaneous provisions) is amended in accordance with this section.

(2) After paragraph 11 insert—

Transfers of interests in oil fields: post-transfer decommissioning expenditure

(11A)

(1) This paragraph applies if—

(a) there is, for the purposes of Schedule 17 to FA 1980, a transfer by a participator in an oil field of the whole or part of an interest in the field, and

(b) on or after 1 November 2018, the OGA gives consent for the transfer.

(2) Paragraph 8(1) (certain subsidised expenditure to be disregarded) does not apply to any decommissioning expenditure that—

(a) is incurred by the new participator, and

(b) has been, or is to be, met directly or indirectly out of a payment made by the old participator.

(3) Sub-paragraph (4) applies if, at the end of the transfer period, the old participator is no longer a licensee or a participator in respect of any licensed area wholly or partly included in the oil field.

(4) Decommissioning expenditure that is incurred by the old participator, after the end of the transfer period, is to be treated for the purposes of this Act as having been incurred by the new participator (and paragraph 8(1) does not apply to any such expenditure).

(5) If the old participator has transferred the whole or part of another interest in the oil field to the new participator, but the condition in sub-paragraph (1)(b) was not met in respect of the transfer, references in sub-paragraphs (2) and (4) to decommissioning expenditure are references to such proportion of that expenditure as is just and reasonable.

(6) In this paragraph—

(a) “ decommissioning expenditure ” means—

(i) expenditure that is incurred, in relation to the oil field mentioned in sub-paragraph (1)(a), for a purpose within section 3(1)(i) or (j) (decommissioning or restoration), and

(ii) is allowable under that section;

(b) “ the old participator ”, “ the new participator ” and “ the transfer period ” have the same meaning as in Schedule 17 to FA 1980 (see paragraph 1(3) of that Schedule).

(7) If there is, for the purposes of Schedule 17 to FA 1980, a subsequent transfer of the whole or part of an interest in the oil field mentioned in sub-paragraph (1)(a), references in this paragraph to “the old participator” include references to each participator whose interest, or part of it, in the oil field is the subject of a transfer to which this paragraph applies.

(3) In paragraph 8, at the end insert—

(3) This paragraph is subject to paragraph 11A (transfers of interests in oil fields: post-transfer decommissioning expenditure).

Section 39 Entrepreneurs' relief

Schedule 16 contains provision amending Part 5 of TCGA 1992 (transfer of business assets, entrepreneurs' relief and investors' relief) in connection with entrepreneurs' relief.

Section 40 Gift aid etc: restrictions on associated benefits

(1) In section 418 of ITA 2007 (gifts to charities by individuals: restrictions on associated benefits) in subsection (2) (the variable limit) for paragraphs (a) to (c) substitute—

(a) in a case where the amount of the gift is £100 or less, 25% of that amount, and

(b) in a case where the amount of the gift exceeds £100, the sum of £25 and 5% of the amount of the excess.

(2) The amendment made by subsection (1) has effect in relation to gifts made on or after 6 April 2019.

(3) In section 197 of CTA 2010 (payments to charities by companies: restrictions on associated benefits) in subsection (2) (the variable limit) for paragraphs (a) to (c) substitute—

(a) in a case where the amount of the payment is £100 or less, 25% of that amount, and

(b) in a case where the amount of the payment exceeds £100, the sum of £25 and 5% of the amount of the excess.

(4) The amendment made by subsection (3) has effect in relation to payments made on or after 6 April 2019.

Section 41 Charities: exemption for small trades etc

(1) In section 528 of ITA 2007 (exemption for small trades of charitable trust: condition that trading incoming resources etc do not exceed requisite limit) in subsection (6)(b) (the requisite limit)—

(a) for “£5,000” substitute £8,000”, and

(b) for “£50,000” substitute “ £80,000 ” .

(2) The amendments made by subsection (1) have effect for the tax year 2019-20 and subsequent tax years.

(3) Section 482 of CTA 2010 (exemption for small trades of charitable company: condition that trading incoming resources etc do not exceed requisite limit) is amended as follows.

(4) In subsection (6)(b) (the requisite limit)—

(a) for “£5,000” substitute “ £8,000 ” , and

(b) for “£50,000” substitute “ £80,000 ” .

(5) In subsection (7)—

(a) for “£5,000” substitute £8,000”, and

(b) for “£50,000” substitute “ £80,000 ” .

(6) The amendments made by subsections (3) to (5) have effect in relation to accounting periods beginning on or after 1 April 2019.

Section 42 Relief for first-time buyers in cases of shared ownership

(1) Schedule 9 to FA 2003 (stamp duty land tax: shared ownership leases etc) is amended as follows.

(2) In paragraph 4 (shared ownership lease: election where staircasing allowed), after sub-paragraph (4) insert—

(4A) See paragraph 15 for further provision in connection with relief for first-time buyers.

(3) After paragraph 14 insert—

Relief for first-time buyers: shared ownership lease where election made

(15) Where—

(a) paragraph 4 applies, and

(b) relief is claimed under paragraph 1 of Schedule 6ZA in respect of the grant of the lease concerned,

no tax is chargeable in respect of so much of the chargeable consideration for the grant as consists of rent.

(4) After paragraph 15 (as inserted by subsection (3)) insert—

Relief for first-time buyers: shared ownership lease where no election made

(15A)

(1) This paragraph applies where—

(a) a shared ownership lease is granted, and

(b) no election is made for tax to be charged in accordance with paragraph 2 or 4.

(2) For the purpose of determining whether the second condition in paragraph 1 of Schedule 6ZA is met in respect of the grant, the chargeable consideration for the grant is to be treated as being the amount stated in the lease in accordance with paragraph 2(2)(e) or paragraph 4(2)(e)(i) or (ii).

(3) If relief is claimed in respect of the grant under paragraph 1 of Schedule 6ZA no tax is chargeable in respect of so much of the chargeable consideration for the grant as consists of rent.

(4) In this paragraph “ shared ownership lease ” has the same meaning as in paragraph 4A.

Relief for first-time buyers: shared ownership trust where no election made

(15B)

(1) This paragraph applies where—

(a) a shared ownership trust is declared, and

(b) no election is made for tax to be charged in accordance with paragraph 9.

(2) For the purpose of determining whether the second condition in paragraph 1 of Schedule 6ZA is met in respect of the declaration, the chargeable consideration for the declaration is to be treated as being the sum specified in the trust in accordance with paragraph 7(4)(f).

(3) If relief is claimed in respect of the declaration under paragraph 1 of Schedule 6ZA no tax is chargeable in respect of any rent-equivalent payment treated by reason of paragraph 11(b) as rent.

(5) For the italic cross-heading before paragraph 16 substitute “ No relief for first-time buyers for staircasing transactions etc ” .

(6) In paragraph 16 (cases where first-time buyer's relief is not available)—

(a) in sub-paragraph (1), omit paragraphs (a), (b) and (d) (but not “or” at the end of paragraph (d)), and

(b) in sub-paragraph (2), omit paragraphs (a) and (c) (but not “or” at the end of paragraph (c)).

(7) The amendments made by this section have effect in relation to—

(a) any land transaction of which the effective date is on or after 29 October 2018, and

(b) any land transaction of which the effective date is before 29 October 2018 and in respect of which a land transaction return has not been given by that date.

Section 43 Repayment to first-time buyers in cases of shared ownership

(1) Until 29 October 2019, a claim for the repayment of tax may be made in respect of a land transaction within subsection (2) or (3).

(2) A transaction is within this subsection if the amount of tax chargeable in respect of the transaction would have been less had the amendment made by section 42(3) been in force from the effective date of the transaction.

(3) A transaction is within this subsection if first-time buyer's relief—

(a) could not have been claimed for the transaction, but

(b) could have been claimed had the amendments made by section 42(4), (5) and (6) been in force from the effective date of the transaction.

(4) Where a claim is made under this section, HMRC must repay—

(a) in a case where the transaction is within subsection (2), so much of the tax paid as exceeds the amount that would have been chargeable had the amendment made by section 42(3) been in force from the effective date of the transaction, and

(b) in a case where the transaction is within subsection (3), so much of the tax paid as exceeds the amount that would have been chargeable had the amendments made by section 42(4), (5) and (6) been in force from the effective date of the transaction and had a claim for first-time buyer's relief been made.

(5) A claim under this section must be made by amendment of the land transaction return.

(6) Sub-paragraphs (2A) and (3) of paragraph 6 of Schedule 10 to FA 2003 do not apply in the case of an amendment of a land transaction return made for the purpose of making a claim under this section.

(7) In this section—

(a) the expressions used have the same meaning as in Part 4 of FA 2003;

(b) “ first-time buyer's relief ” means relief under Schedule 6ZA to FA 2003.

Section 44 Higher rates of tax for additional dwellings etc

(1) Schedule 4ZA to FA 2003 (stamp duty land tax: higher rates for additional dwellings and dwellings purchased by companies) is amended as follows.

(2) In paragraph 2 (meaning of “higher rates transaction” etc) after sub-paragraph (4) insert—

(5) References in this Schedule to a major interest in a dwelling include an undivided share in a major interest in a dwelling.

(3) The amendment made by subsection (2) has effect in relation to any land transaction of which the effective date is on or after 29 October 2018.

(4) In paragraph 8(3) (period during which land transaction return may be amended to take account of subsequent disposal of main residence) for the words from “whichever” to the end substitute “the period of 12 months beginning with—

(a) the effective date of the subsequent transaction, or

(b) if later, the filing date for the return.

(5) The amendment made by subsection (4) has effect in a case where the effective date of the subsequent transaction is on or after 29 October 2018.

Section 45 Exemption in respect of financial institutions in resolution

(1) In FA 2003, after section 66 insert—

Resolution of financial institutions

(66A)

(1) A land transaction is exempt from charge if it is effected by—

(a) an instrument listed in subsection (2), or

(b) an instrument made under an instrument listed in subsection (2).

(2) The instruments are—

(a) a property transfer instrument made in accordance with section 12(2) of the Banking Act 2009 (transfer to a bridge bank),

(b) a property transfer instrument made in accordance with section 12ZA(3) of that Act (transfer to asset management vehicle),

(c) a supplemental property transfer instrument made in accordance with section 42(2) of that Act where the original instrument was made in accordance with section 12(2), 12ZA(3) or 41A(2) of that Act,

(d) a property transfer instrument made in accordance with section 41A(2) of that Act (transfer of property subsequent to resolution instrument),

(e) a bridge bank supplemental property transfer instrument made in accordance with section 44D(2) of that Act,

(f) a property transfer order made in accordance with section 45(2) of that Act (temporary public ownership: property transfer), or

(g) a third-country instrument made in accordance with section 89H(2) or 89I(4) of that Act.

(3) References in subsection (2) to a provision of the Banking Act 2009 include references to that provision as applied by or under any other provision of that Act (including where it is applied with modifications or in a substituted form).

(2) The amendment made by this section has effect in relation to any land transaction the effective date of which is on or after the day on which this Act is passed.

Section 46 Changes to periods for delivering returns and paying tax

(1) FA 2003 is amended as follows.

(2) In section 76(1) (duty to deliver land transaction return), for “30 days” substitute “ 14 days ” .

(3) For section 80(2) (adjustment where contingency ceases or consideration is ascertained) substitute—

(2) If the effect of the new information is that a transaction becomes notifiable, the purchaser must make a return to HMRC within 14 days.

(2A) If the effect of the new information is that—

(a) tax is payable in respect of a transaction where none was payable before and subsection (2) does not apply, or

(b) additional tax is payable in respect of a transaction,

the purchaser must make a further return to HMRC within 30 days.

(2B) For the purposes of subsections (2) and (2A), any tax or additional tax payable is calculated according to the effective date of the transaction.

(2C) If a purchaser is required to make a return under subsection (2) or a further return under subsection (2A)—

(a) that return must contain a self-assessment of the tax chargeable in respect of the transaction on the basis of the information contained in the return, and

(b) the tax or additional tax payable must be paid not later than the filing date for that return.

(4) In section 81 (further return where relief withdrawn)—

(a) in subsection (1B)—

(i) after paragraph (c) insert—

(ca) in the case of relief under paragraph 5CA of that Schedule (acquisition under a regulated home reversion plan), the first day in the period mentioned in paragraph 5IA(2) of that Schedule on which the purchaser holds the higher threshold interest otherwise than for the purposes of the regulated home reversion plan, unless paragraph 5IA(3)(a) and (b) applies;

(ii) after paragraph (d) insert—

(da) in the case of relief under paragraph 5EA of that Schedule (acquisition by management company of flat for occupation by caretaker), the first day in the period mentioned in paragraph 5JA(2) of that Schedule on which the purchaser holds the higher threshold interest otherwise than for the purpose of making the flat available for use as caretaker accommodation;

(b) in subsection (2A), after “subsection (1)” insert “ or (1A) ” .

(5) For section 81A(1) (return or further return in consequence of later linked transaction) substitute—

(1) Where the effect of a transaction (“the later transaction”) that is linked to an earlier transaction is that the earlier transaction becomes notifiable, the purchaser under the earlier transaction must deliver a return in respect of that transaction before the end of the period of 14 days after the effective date of the later transaction.

(1A) Where the effect of a transaction (“the later transaction”) that is linked to an earlier transaction is that—

(a) tax is payable in respect of the earlier transaction where none was payable before and subsection (1) does not apply, or

(b) additional tax is payable in respect of the earlier transaction,

the purchaser under the earlier transaction must deliver a further return in respect of that transaction before the end of the period of 30 days after the effective date of the later transaction.

(1B) For the purposes of subsections (1) and (1A), any tax or additional tax payable is calculated according to the effective date of the earlier transaction.

(1C) Where a purchaser is required to deliver a return under subsection (1) or a further return under subsection (1A)—

(a) that return must include a self-assessment of the amount of tax chargeable as a result of the later transaction, and

(b) the tax or additional tax payable must be paid not later than the filing date for that return.

(6) In section 86(2) (payment of tax), before paragraph (a) insert—

(za) any of paragraphs 5G to 5K of Schedule 4A (higher rate for certain transactions),

(7) In section 87 (interest on unpaid tax)—

(a) after subsection (1) insert—

(1A) But where the relevant date is determined by subsection (3)(aa), (aaa), (ab) or (c), and a return is required to be delivered before the end of the period of 14 days after that relevant date, interest is instead payable on the amount of any unpaid tax from the end of that period until the tax is paid.

(b) in subsection (2), after “subsection (1)” insert “ or (1A) ” , and

(c) in subsection (3), before paragraph (a) insert—

(za) in the case of an amount payable because relief is withdrawn under any of paragraphs 5G to 5K of Schedule 4A (higher rate for certain transactions), the date which is the relevant date for the purposes of section 81(1A);

(8) In Schedule 17A (further provisions relating to leases)—

(a) for paragraph 3(3) substitute—

(3) Where the effect of sub-paragraph (2) in relation to the continuation of the lease for a period (or further period) of one year after the end of a fixed term is that a transaction becomes notifiable, the purchaser must deliver a return in respect of that transaction before the end of the period of 14 days after the end of that one year period.

(3ZA) Where the effect of sub-paragraph (2) in relation to the continuation of the lease for a period (or further period) of one year after the end of a fixed term is that—

(a) tax is payable in respect of a transaction where none was payable before and sub-paragraph (3) does not apply, or

(b) additional tax is payable in respect of a transaction,

the purchaser must deliver a further return in respect of that transaction before the end of the period of 30 days after the end of that one year period.

(3ZB) For the purposes of sub-paragraphs (3) and (3ZA), any tax or additional tax payable is calculated according to the effective date of the transaction.

(3ZC) Where a purchaser is required to deliver a return under sub-paragraph (3) or a further return under sub-paragraph (3ZA)—

(a) that return must include a self-assessment of the amount of tax chargeable in respect of the transaction on the basis of the information contained in the return, and

(b) the tax or additional tax payable must be paid not later than the filing date for that return.

(b) for paragraph 4(3) substitute—

(3) Where the effect of sub-paragraph (1) in relation to the continuation of the lease after the end of a deemed fixed term is that a transaction becomes notifiable, the purchaser must deliver a return in respect of that transaction before the end of the period of 14 days after the end of that term.

(3A) Where the effect of sub-paragraph (1) in relation to the continuation of the lease after the end of a deemed fixed term is that—

(a) tax is payable in respect of a transaction where none was payable before and sub-paragraph (3) does not apply, or

(b) additional tax is payable in respect of a transaction,

the purchaser must deliver a further return in respect of that transaction before the end of the period of 30 days after the end of that term.

(3B) For the purposes of sub-paragraphs (3) and (3A), any tax or additional tax payable is calculated according to the effective date of the transaction.

(3C) Where a purchaser is required to deliver a return under sub-paragraph (3) or a further return under sub-paragraph (3A)—

(a) that return must include a self-assessment of the amount of tax chargeable in respect of the transaction on the basis of the information contained in the return, and

(b) the tax or additional tax payable must be paid not later than the filing date for that return.

(c) for paragraph 8(3) substitute—

(3) If the result as regards the rent paid or payable in respect of the first five years of the term of the lease is that a transaction becomes notifiable, the purchaser must make a return to HMRC within 14 days of the date referred to in sub-paragraph (1)(a) or (b).

(3A) If the result as regards the rent paid or payable in respect of the first five years of the term of the lease is that—

(a) tax is payable in respect of a transaction where none was payable before and sub-paragraph (3) does not apply, or

(b) additional tax is payable in respect of a transaction,

the purchaser must make a further return to HMRC within 30 days of the date referred to in sub-paragraph (1)(a) or (b).

(3B) If a purchaser is required to make a return under sub-paragraph (3) or a further return under sub-paragraph (3A)—

(a) that return must contain a self-assessment of the tax chargeable in respect of the transaction on the basis of the information contained in the return,

(b) the tax so chargeable is to be calculated by reference to the rates in force at the effective date of the transaction, and

(c) the tax or additional tax payable must be paid not later than the filing date for that return.

(9) In Schedule 61 to FA 2009 (alternative finance investment bonds)—

(a) in paragraph 7(5) (interest due on first transaction where relief is withdrawn) for “30 days” substitute “ 14 days ” , and

(b) in paragraph 20(3)(a) (no relief where bond-holder acquires control of underlying asset) for “30 days” substitute “ 14 days ” .

(10) The amendments made by this section are to be treated as having effect in relation to—

(a) any land transaction with an effective date on or after 1 March 2019, and

(b) any land transaction with an effective date before 1 March 2019 which becomes notifiable on or after 1 March 2019.

Section 47 Stamp duty: transfers of listed securities and connected persons

(1) This section applies if—

(a) an instrument transfers listed securities to a company or a company's nominee (whether or not for consideration), and

(b) the person transferring the securities is connected with the company or is the nominee of a person connected with the company.

(2) “Listed securities” are stock or marketable securities which are regularly traded on—

(a) a regulated market,

(b) a multilateral trading facility, or

(c) a recognised foreign exchange,

and expressions used in paragraphs (a) to (c) have the same meaning as in section 80B of FA 1986 (intermediaries: supplementary).

(3) For the purposes of the enactments relating to stamp duty—

(a) in a case where listed securities are transferred for consideration which consists of money or any stock or security, or to which section 57 of the Stamp Act 1891 applies, the amount or value of the consideration is to be treated as being equal to—

(i) the amount or value of the consideration for the transfer, or

(ii) if higher, the value of the listed securities;

(b) in any other case, the transfer of listed securities effected by the instrument is to be treated as being for an amount of consideration in money equal to the value of the listed securities.

(4) For the purposes of subsection (3)—

(a) “ the enactments relating to stamp duty ” means the Stamp Act 1891 and any enactment amending that Act or that is to be construed as one with that Act, and

(b) the value of listed securities is to be taken to be the price which they might reasonably be expected to fetch on a sale in the open market at the date the instrument is executed.

(5) Section 1122 of CTA 2010 (connected persons) has effect for the purposes of this section.

(6) The Treasury may by regulations made by statutory instrument provide for this section not to apply in relation to particular cases.

(7) Regulations under subsection (6) may have effect in relation to instruments executed before the regulations come into force.

(8) A statutory instrument containing regulations under subsection (6) is subject to annulment in pursuance of a resolution of the House of Commons.

(9) This section is to be construed as one with the Stamp Act 1891.

(10) This section has effect in relation to instruments executed on or after 29 October 2018.

Section 47A Stamp duty: transfers of unlisted securities and connected persons

(1) This section applies if—

(a) an instrument transfers unlisted securities to a company or a company’s nominee for consideration,

(b) the person transferring the securities is connected with the company or is the nominee of a person connected with the company, and

(c) some or all of the consideration consists of the issue of shares.

(2) In this section “unlisted securities” means stock or marketable securities that are not listed securities within the meaning of section 47 (stamp duty: transfers of listed securities and connected persons).

(3) For the purposes of the enactments relating to stamp duty the amount or value of the consideration is to be treated as being equal to—

(a) the amount or value of the consideration for the transfer, or

(b) if higher, the value of the unlisted securities.

(4) For the purposes of subsection (3) “the enactments relating to stamp duty” means the Stamp Act 1891 and any enactment amending that Act or that is to be construed as one with that Act.

(5) For the purposes of this section—

(a) the value of unlisted securities is to be taken to be the market value of the securities at the date the instrument is executed;

(b) “market value” has the same meaning as in TCGA 1992 and is to be determined in accordance with sections 272 and 273 of that Act (valuation).

(6) Section 1122 of CTA 2010 (connected persons) has effect for the purposes of this section.

(7) This section is to be construed as one with the Stamp Act 1891.

(8) This section has effect in relation to instruments executed on or after the date on which FA 2020 is passed.

Section 48 SDRT: listed securities and connected persons

(1) This section applies if a person is connected with a company and—

(a) the person or the person's nominee agrees to transfer listed securities to the company or the company's nominee (whether or not for consideration), or

(b) the person or the person's nominee transfers such securities to the company or the company's nominee for consideration in money or money's worth.

(2) “Listed securities” are chargeable securities which are regularly traded on—

(a) a regulated market,

(b) a multilateral trading facility, or

(c) a recognised foreign exchange,

and expressions used in paragraphs (a) to (c) have the same meaning as in section 88B of FA 1986 (intermediaries: supplementary).

(3) For the purposes of stamp duty reserve tax chargeable under section 87 of FA 1986 (the principal charge)—

(a) in a case where the agreement is one to transfer listed securities for consideration in money or money's worth, the amount or value of the consideration is to be treated as being equal to—

(i) the amount or value of the consideration for the transfer, or

(ii) if higher, the value of the listed securities at the time the agreement is made;

(b) in any other case, the agrement to transfer listed securities is to be treated as being one for an amount of consideration in money equal to the value of the listed securities at the time the agreement is made.

(4) Subsection (5) has effect for the purposes of stamp duty reserve tax chargeable under section 93 (depositary receipts) or 96 (clearance services) of FA 1986.

(5) If the amount or value of the consideration for any transfer of listed securities is less than the value of those securities at the time they are transferred, the transfer is to be treated as being for an amount of consideration in money equal to that value.

(6) For the purposes of this section, the value of listed securities at any time is the price which they might reasonably be expected to fetch on a sale in the open market at that time.

(7) Section 1122 of CTA 2010 (connected persons) has effect for the purposes of this section.

(8) The Treasury may by regulations made by statutory instrument provide for this section not to apply in relation to particular cases.

(9) Regulations under subsection (8) may have effect in relation to transactions entered into before the regulations come into force.

(10) A statutory instrument containing regulations under subsection (8) is subject to annulment in pursuance of a resolution of the House of Commons.

(11) This section is to be construed as one with Part 4 of FA 1986.

(12) This section has effect—

(a) in relation to the charge to tax under section 87 of FA 1986 where—

(i) the agreement to transfer securities is conditional and the condition is satisfied on or after 29 October 2018, or

(ii) in any other case, the agreement is made on or after that date;

(b) in relation to the charge to tax under section 93 or 96 of that Act, where the transfer is on or after 29 October 2018 (whenever the arrangement was made).

Section 48A SDRT: unlisted securities and connected persons

(1) This section applies if a person is connected with a company and—

(a) the person or the person’s nominee—

(i) agrees to transfer unlisted securities to the company or the company’s nominee for consideration in money or money’s worth, or

(ii) transfers such securities to the company or the company’s nominee for consideration in money or money’s worth, and

(b) some or all of the consideration consists of the issue of shares.

(2) In this section “unlisted securities” means chargeable securities that are not listed securities within the meaning of section 48 (SDRT: listed securities and connected persons).

(3) For the purposes of stamp duty reserve tax chargeable under section 87 of FA 1986 (the principal charge), the amount or value of the consideration is to be treated as being equal to—

(a) the amount or value of the consideration for the transfer, or

(b) if higher, the market value of the unlisted securities at the time the agreement is made.

(4) Subsection (5) has effect for the purposes of stamp duty reserve tax chargeable under section 93 of FA 1986 (depositary receipts) or section 96 of that Act (clearance services).

(5) If the amount or value of the consideration for any transfer of unlisted securities is less than the value of those securities at the time they are transferred, the transfer is to be treated as being for an amount of consideration in money equal to that value.

(6) For the purposes of this section—

(a) the value of unlisted securities is to be taken to be their market value;

(b) “market value” has the same meaning as in TCGA 1992 and is to be determined in accordance with sections 272 and 273 of that Act (valuation).

(7) Section 1122 of CTA 2010 (connected persons) has effect for the purposes of this section.

(8) This section is to be construed as one with Part 4 of FA 1986.

(9) This section has effect—

(a) in relation to the charge to tax under section 87 of FA 1986 where—

(i) the agreement to transfer securities is conditional and the condition is satisfied on or after the relevant date, or

(ii) in any other case, the agreement is made on or after that date;

(b) in relation to the charge to tax under section 93 or 96 of that Act, where the transfer is on or after the relevant date (whenever the arrangement was made).

In this subsection “the relevant date” is the day on which FA 2020 is passed.