Finance Act 2016

Royal Assent 15 September 2016

CONTENTS

PART 1

INCOME TAX

Charge and principal rates etc

1 Income tax charge and rates for 2016-17

2 Basic rate limit for 2017-18

3 Personal allowance for 2017-18

Rate structure

4 Savings allowance, and savings nil rate etc

5 Rates of tax on dividend income, and abolition of dividend tax credits etc

6 Structure of income tax rates

Employment income: taxable benefits

7 Taxable benefits: application of Chapters 5 to 7 of Part 3 of ITEPA 2003

8 Cars: appropriate percentage for 2019-20 and subsequent tax years

9 Cars which cannot emit CO2: appropriate percentage for 2017-18 and 2018-19

10 Diesel cars: appropriate percentage

11 Cash equivalent of benefit of a van

12 Tax treatment of payments from sporting testimonials

13 Exemption for trivial benefits provided by employers

14 Travel expenses of workers providing services through intermediaries

15 Taxable benefits: PAYE

Employment income: other provision

16 Employee share schemes

17 Securities options

18 Employment income provided through third parties

Pensions

19 Standard lifetime allowance from 2016-17

20 Pensions bridging between retirement and state pension

21 Dependants’ scheme pensions

22 Pension flexibility

23 Netherlands Benefit Act for Victims of Persecution 1940-1945

Trading and other income

24 Fixed-rate deductions for use of home for business purposes

25 Averaging profits of farmers etc

26 Relief for finance costs related to residential property businesses

27 Individual investment plans of deceased investors

Reliefs: enterprise investment scheme, venture capital trusts etc

28 EIS, SEIS and VCTs: exclusion of energy generation

29 EIS and VCTs: definition of certain periods

30 EIS and VCTs: election

31 VCTs: requirements for giving approval

Reliefs: peer-to-peer lending

32 Income tax relief for irrecoverable peer-to-peer loans

Transactions in securities

33 Transactions in securities: company distributions

34 Transactions in securities: procedure for counteraction of advantage

35 Distributions in a winding up

Disguised fees and carried interest

36 Disguised investment management fees

37 Income-based carried interest

38 Income-based carried interest: persons coming to the UK

Deduction at source

39 Deduction of income tax at source

40 Deduction of income tax at source: intellectual property

41 Deduction of income tax at source: intellectual property - tax avoidance

Receipts from intellectual property

42 Receipts from intellectual property: territorial scope

43 Receipts from intellectual property: diverted profits tax

Supplementary welfare payments: Northern Ireland

44 Tax treatment of supplementary welfare payments: Northern Ireland

PART 2

CORPORATION TAX

Charge and rates

45 Charge for financial year 2017

46 Rate of corporation tax for financial year 2020

Research and development

47 Abolition of vaccine research relief

48 Cap on R&D aid

Loan relationships

49 Loan relationships and derivative contracts

50 Loans to participators etc: rate of tax

51 Loans to participators etc: trustees of charitable trusts

Intangible fixed assets

52 Intangible fixed assets: pre-FA 2002 assets

53 Intangible fixed assets: transfers treated as at market value

Creative industry reliefs

54 Tax relief for production of orchestral concerts

55 Television and video games tax relief: consequential amendments

Banking companies

56 Banking companies: excluded entities

57 Banking companies: restrictions on loss relief etc

Oil and gas

58 Reduction in rate of supplementary charge

59 Investment allowance: disqualifying conditions

60 Investment allowance: power to expand meaning of “relevant income”

61 Onshore allowance: disqualifying conditions

62 Cluster area allowance: disqualifying conditions

63 Cluster area allowance: power to expand meaning of “relevant income”

Exploitation of patents etc

64 Profits from the exploitation of patents etc

Miscellaneous

65 Power to make regulations about the taxation of securitisation companies

66 Hybrid and other mismatches

67 Insurance companies carrying on long-term business

68 Taking over payment obligations as lessee of plant or machinery

PART 3

INCOME TAX AND CORPORATION TAX

Capital allowances

69 Capital allowances: designated assisted areas

70 Capital allowances: anti-avoidance relating to disposals

Trade and property business profits

71 Trade and property business profits: money’s worth

72 Replacement and alteration of tools

Property business deductions

73 Property business deductions: replacement of domestic items

74 Property business deductions: wear and tear allowance

Transfer pricing

75 Transfer pricing: application of OECD principles

Transactions in UK land

76 Corporation tax: territorial scope etc

77 Corporation tax: transactions in UK land

78 Income tax: territorial scope etc

79 Income tax: transactions in UK land

80 Pre-trading expenses

81 Commencement and transitional provision: sections 76, 77 and 80

82 Commencement and transitional provision: sections 78 and 79

PART 4

CAPITAL GAINS TAX

Rate

83 Reduction in rate of capital gains tax

Entrepreneurs' relief

84 Entrepreneurs’ relief: associated disposals

85 Entrepreneurs’ relief: disposal of goodwill

86 Entrepreneurs’ relief: “trading company” and “trading group”

Investors' relief

87 Investors’ relief

Employee shareholder shares

88 Employee shareholder shares: limit on exemption

89 Employee shareholder shares: disguised fees and carried interest

Other provisions

90 Disposals of UK residential property by non-residents etc

91 NRCGT returns

92 Addition of CGT to Provisional Collection of Taxes Act 1968

PART 5

INHERITANCE TAX ETC

93 Inheritance tax: increased nil-rate band

94 Inheritance tax: pension drawdown funds

95 Inheritance tax: victims of persecution during Second World War era

96 Inheritance tax: gifts for national purposes etc

97 Estate duty: objects of national, scientific, historic or artistic interest

PART 6

APPRENTICESHIP LEVY

Basic provisions

98 Apprenticeship levy

99 Charge to apprenticeship levy

100 A person’s pay bill for a tax year

Connected companies and charities

101 Connected companies

102 Connected charities

Anti-avoidance

103 Anti-avoidance

104 Application of other regimes to apprenticeship levy

Payment, collection and recovery

105 Assessment, payment etc

106 Recovery from third parties

107 Real time information

108 Time limits for assessment

109 No deduction in respect of levy to be made from earnings

110 Collectors and court proceedings

Information and penalties

111 Records

112 Information and inspection powers

113 Penalties

Appeals

114 Appeals

General

115 Tax agents: dishonest conduct

116 Provisional collection of apprenticeship levy

117 Crown application

118 Charities which are “connected” with one another

119 Connection between charities: further provision

120 General interpretation

121 Regulations

PART 7

VAT

122 VAT: power to provide for persons to be eligible for refunds

123 VAT: representatives and security

124 VAT: joint and several liability of operators of online marketplaces

125 VAT: Isle of Man charities

126 VAT: women’s sanitary products

PART 8

SDLT AND ATED

Stamp duty land tax

127 SDLT: calculating tax on non-residential and mixed transactions

128 SDLT: higher rates for additional dwellings etc

129 SDLT higher rate: land purchased for commercial use

130 SDLT higher rate: acquisition under regulated home reversion plan

131 SDLT higher rate: properties occupied by certain employees etc

132 SDLT: minor amendments of section 55 of FA 2003

133 SDLT: property authorised investment funds and co-ownership authorised contractual schemes

Annual tax on enveloped dwellings

134 ATED: regulated home reversion plans

135 ATED: properties occupied by certain employees etc

136 ATED: alternative property finance - land in Scotland

 

PART 9

OTHER TAXES AND DUTIES

Stamp duty and stamp duty reserve tax

137 Stamp duty: acquisition of target company’s share capital

138 Stamp duty: transfers to depositaries or providers of clearance services

139 SDRT: transfers to depositaries or providers of clearance services

Petroleum revenue tax

140 Petroleum revenue tax: rate

Insurance premium tax

141 Insurance premium tax: standard rate

Landfill tax

142 Landfill tax: rates from 1 April 2017

143 Landfill tax: rates from 1 April 2018

Climate change levy

144 CCL: abolition of exemption for electricity from renewable sources

145 CCL: main rates from 1 April 2017

146 CCL: main rates from 1 April 2018

147 CCL: main rates from 1 April 2019

148 CCL: reduced rates from 1 April 2019

Air passenger duty

149 APD: rates from 1 April 2016

Vehicle excise duty

150 VED: rates for light passenger vehicles, light goods vehicles, motorcycles etc

151 VED: extension of old vehicles exemption from 1 April 2017

Other excise duties

152 Gaming duty: rates

153 Fuel duties: aqua methanol etc

154 Tobacco products duty: rates

155 Alcoholic liquor duties: rates

PART 10

TAX AVOIDANCE AND EVASION

General anti-abuse rule

156 General anti-abuse rule: provisional counteractions

157 General anti-abuse rule: binding of tax arrangements to lead arrangements

158 General anti-abuse rule: penalty

Tackling frequent avoidance

159 Serial tax avoidance

160 Promoters of tax avoidance schemes

161 Large businesses: tax strategies and sanctions for persistently unco-operative behaviour

Offshore activities

162 Penalties for enablers of offshore tax evasion or non-compliance

163 Penalties in connection with offshore matters and offshore transfers

164 Offshore tax errors etc: publishing details of deliberate tax defaulters

165 Asset-based penalties for offshore inaccuracies and failures

166 Offences relating to offshore income, assets and activities

PART 11

ADMINISTRATION, ENFORCEMENT AND SUPPLEMENTARY POWERS

Assessment and returns

167 Simple assessments

168 Time limit for self assessment tax returns

169 HMRC power to withdraw notice to file a tax return

Judgment debts

170 Rate of interest applicable to judgment debts etc: Scotland

171 Rate of interest applicable to judgment debts etc: Northern Ireland

172 Rate of interest applicable to judgment debts etc: England and Wales

Enforcement powers

173 Gift aid: power to impose penalties on charities and intermediaries

174 Proceedings under customs and excise Acts: prosecuting authority

175 Detention and seizure under CEMA 1979: notice requirements etc

176 Data-gathering powers: providers of payment or intermediary services

177 Data-gathering powers: daily penalties for extended default

Payment

178 Extension of provisions about set-off to Scotland

Raw tobacco

179 Raw tobacco approval scheme

State aids granted through provision of tax advantages

180 Powers to obtain information about certain tax advantages

181 Power to publish state aid information

182 Information powers: supplementary

Qualifying transformer vehicles

183 Qualifying transformer vehicles

 

PART 12

OFFICE OF TAX SIMPLIFICATION

184 Office of Tax Simplification

185 Functions of the OTS: general

186 Functions of the OTS: reviews and reports

187 Annual report

188 Review of the OTS

189 Commencement

PART 13

FINAL

190 Interpretation

191 Short title

SCHEDULES

 

Schedule 1 — Abolition of dividend tax credits etc

Schedule 2 — Sporting testimonial payments

Schedule 3 — Employee share schemes: minor amendments

Schedule 4 — Pensions: lifetime allowance: transitional provision

Part 1 — “Fixed protection 2016”

Part 2 — “Individual protection 2016”

Part 3 — Reference numbers etc

Part 4 — Information

Part 5 — Amendments in connection with protection of pre-6 April 2006 rights

Part 6 — Interpretation and regulations

Schedule 5 — Pension flexibility

Schedule 6 — Deduction of income tax at source

Part 1 — Abolition of duty to deduct tax from interest on certain investments

Part 2 — Deduction of tax from yearly interest: exception for deposit-takers

Part 3 — Amendments of or relating to Chapter 2 of Part 15 of ITA 2007

Part 4 — Deduction of tax from UK public revenue dividends

Part 5 — Commencement

Schedule 7 — Loan relationships and derivative contracts

Schedule 8 — Tax relief for production of orchestral concerts

Part 1 — Amendment of CTA 2009

Part 2 — Consequential amendments

Part 3 — Commencement

Schedule 9 — Profits from the exploitation of patents etc: consequential

Schedule 10 — Hybrid and other mismatches

Part 1 — Main provisions

Part 2 — Consequential amendments

Part 3 — Commencement

Schedule 11 — Disposals of non-UK residential property interests

Schedule 12 — Disposals of residential property interests: gains and losses

Schedule 13 — Entrepreneurs’ relief: “trading company” and “trading group”

Schedule 14 — Investors’ relief

Schedule 15 — Inheritance tax: increased nil-rate band

Schedule 16 — Property authorised investment funds and co-ownership authorised contractual schemes

Part 1 — Co-ownership authorised contractual schemes

Part 2 — Seeding relief for property authorised investment funds and co-ownership authorised contractual schemes

Part 3 — Consequential amendments

Part 4 — Commencement

Schedule 17 — Aqua methanol etc

Part 1 — Aqua methanol

Part 2 — Hydrocarbon oils: miscellaneous amendments

Part 3 — Commencement

Schedule 18 — Serial tax avoidance

Part 1 — Contents of Schedule

Part 2 — Entry into the regime and basic concepts

Part 3 — Annual information notices and naming

Part 4 — Restriction of reliefs

Part 5 — Penalty

Part 6 — Corporate groups, associated persons and partnerships

Part 7 — Supplemental

Schedule 19 — Large businesses: tax strategies and sanctions

Part 1 — Interpretation

Part 2 — Publication of tax strategies

Part 3 — Sanctions for persistently unco-operative large businesses

Part 4 — Supplementary

Schedule 20 — Penalties for enablers of offshore tax evasion or noncompliance

Part 1 — Liability for penalty

Part 2 — Application of Schedule 36 to FA 2008: information powers

Part 3 — Publishing details of persons found liable to penalties

Schedule 21 — Penalties relating to offshore matters and offshore transfers

Schedule 22 — Asset-based penalty for offshore inaccuracies and failures

Part 1 — Liability for penalty

Part 2 — Amount of penalty

Part 3 — Identification and valuation of assets

Part 4 — Procedure

Part 5 — General

Schedule 23 — Simple assessments

Schedule 24 — Tax advantages constituting the grant of state aid

Part 1 — Tax advantages to which section 180(2) applies

Part 2 — Tax advantages to which section 180(5) applies

Schedule 25 — Office of Tax Simplification

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