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
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
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
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
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
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
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