Finance Act 2013 - legislation

1 Finance Act 2013 CHAPTER 29 Finance Act 2013 CHAPTER 29 CONTENTSPART 1 INCOME TAX, CORPORATION TAX AND CAPITAL GAINS TAXCHAPTER 1 CHARGES, RATES ETCI ncome tax1 Charge for 2013 -142 Personal allowance for 2013 -14 for those born after 5 April 19483 Basic rate limit for 2013 -14 Corporation tax4 Charge and main rate for financial year 20145 Small profits rate and fractions for financial year 20136 Main rate for financial year 2015 Capital allowances7 Temporary increase in annual investment allowanceCHAPTER 2 INCOME TAX: GENERALE xemptions and reliefs8 London Anniversary Games9 Glasgow Commonwealth Games10 Expenses of elected representativesFinance Act 2013 (c. 29)ii11 Exemption from income tax of contributions to pension schemes12 Childcare exemptions: meaning of disabled child13 Income tax exemption for universal credit14 Tax advantaged employee share schemes15 Abolition of tax relief for patent royalties16 Limit on income tax reliefsTrade profits17 Cash basis for small businesses18 Deductions allowable at a fixed rateOther provisions19 Employment income: duties performed in the UK and overseas20 Remittance basis: exempt property21 Payments on account22 Arrangements made by intermediaries23 Taxable benefit of cars: the appropriate percentage24 Gains from contracts for life insurance etc25 Qualifying insurance policies26 Transfer of assets abroad27 Payments of interest28 Disguised interestCHAPTER 3 CORPORATION TAX: GENERALL osses, other reliefs and deductions29 Restriction on surrender of losses.

2 Controlled foreign company cases30 Loss relief surrenderable by non-UK resident established in EEA state31 Arrangements for transfers of companies32 Change in company ownership: company reconstructions33 Change in company ownership: shell companies34 Transfer of deductions35R&D expenditure credits36 Relief for television production and video games developmentExemption from charge37 Health service bodies: exemption38 Chief constables etc (England and Wales): exemptionOther provisions39 Real estate investment trusts: UK REITs which invest in other UK REITs40 Corporation tax relief for employee share acquisitions etc41 Derivative contracts: property total return swaps etc42 Corporation tax: tax mismatch schemes43 Tier two capital44 Financing costs and income: group treasury companies45 Condition for company to be an investment trust Finance Act 2013 (c. 29)iii46 Community amateur sports clubsCHAPTER 4 PENSIONS47 Lifetime allowance charge: power to amend the transitional provision in Part2 of Schedule 18 to FA 2011 etc48 Lifetime allowance charge: new standard lifetime allowance for the tax year2014-15 and subsequent tax years49 Annual allowance: new annual allowance for the tax year 2014-15 andsubsequent tax years50 Drawdown pensions and dependants drawdown pensions51 Bridging pensions52 Abolition of contracting out of state second pension: consequentialamendments etc53 Overseas pension schemes: general54 Overseas pension schemes: information and inspection powersCHAPTER 5 OTHER PROVISIONSE mployee shareholder shares55 Employee shareholder sharesSeed enterprise investment scheme56 SEIS: income tax relief57 SEIS.

3 Re-investment reliefDisincorporation58 Disincorporation relief59 Qualifying business transfer60 Making a claim61 Effect of disincorporation reliefCapital gains62 Attribution of gains to members of non-resident companies63 Heritage maintenance settlements64 EMI options and entrepreneurs relief etc65 Charge on certain high value disposals by companies etc66 Currency used in tax calculations: chargeable gains and lossesCapital allowances67 Allowances for energy-saving plant and machinery: Northern Ireland68 Cars with low carbon dioxide emissions69 Gas refuelling stations: extension of time limit for capital allowance70 First-year allowance to be available for ships and railway assets71 Restrictions on buying capital allowancesFinance Act 2013 (c. 29)iv72 Hire cars for disabled persons73 Contribution allowances: plant and machineryMiscellaneous74 Community investment tax relief75 Lease premium relief76 Manufactured payments: stock lending arrangements77 Manufactured payments.

4 General78 Relationship between rules prohibiting and allowing deductions79 Close companiesPART 2 OILD ecommissioning relief agreements80 Decommissioning relief agreements81 Meaning of decommissioning expenditure 82 Annual report83 Effect of claim on PRT84 Terminal losses accruing by virtue of another s default85 Claims under agreement not to affect oil allowanceDecommissioning security settlements86 Removal of IHT charges in respect of decommissioning security settlements87 Loan relationships arising from decommissioning security settlementsDecommissioning expenditure etc88 Decommissioning expenditure taken into account for PRT purposes89 Miscellaneous amendments relating to decommissioningCapital allowances90 Expenditure on decommissioning onshore installations91 Expenditure on decommissioning certain redundant plant or machinery92 Expenditure on site restoration93 Restrictions on allowances for certain oil-related expenditurePART 3 ANNUAL TAX ON ENVELOPED DWELLINGSThe charge to tax94 Charge to tax95 Entitlement to interests96 Person liable97 Liability of persons jointly entitled98 Collective investment schemes: liability for and collection of tax99 Amount of tax chargeableFinance Act 2013 (c.)

5 29)v100 Interim relief101 Indexation of annual chargeable amounts102 Taxable value103 Section 102: substantial acquisitions and disposals104No double chargeAdjustment of amount charged105 Adjusted chargeable amount 106 Adjustment of amount chargeableChargeable interests and single-dwelling interest 107 Chargeable interests108 Meaning of single-dwelling interest 109 Different interests held in the same dwelling110 Interests held by connected persons111 Different interests held in the same dwelling: effect of reliefs etcMeaning of dwelling 112 Meaning of dwelling 113 Substantial performance of off plan purchase114 Power to modify meaning of use as a dwelling 115 Parts of a greater whole116 Dwelling in grounds of another dwelling117 Dwellings in the same building118 Section 117: supplementary119 Terraces etcAcquisitions and disposals120 Acquisitions and disposals of chargeable interests121 Date of acquisition or disposal122 Contract and conveyance: the purchaser123 Contract and conveyance: the vendorNew dwellings, conversions, demolition etc124 New dwellings125 Dwellings produced from other dwellings126 Demolition of a dwelling127 Demolition without replacement128 Demolition and replacement: new dwellings129 Demolition and replacement: other cases130 Conversion of dwelling for non-residential use131 Damage to a dwellingReliefs132 Effect of reliefs under sections 133 to 150133 Property rental businesses134 Rental property: preparation for sale, demolition etc135 Non-qualifying occupation: look-forward and look-backFinance Act 2013 (c.

6 29)vi136 Meaning of non-qualifying individual 137 Dwellings opened to the public138 Property developers139 Property developers: exchange of dwellings140 Property developers: supplementary141 Property traders142 Property traders: supplementary143 Financial institutions acquiring dwellings in the course of lending144 Section 143: supplementary145 Occupation by certain employees or partners146 Meaning of qualifying employee and qualifying partner in section 145147 Meaning of 10% or greater share in a company 148 Farmhouses149 Farm worker and former long-serving farm worker 150 Providers of social housingExemptions151 Charitable companies152 Section 151: supplementary153 Public bodies154 Bodies established for national purposes155 Dwelling conditionally exempt from inheritance taxPower to modify reliefs156 Modification of reliefsAlternative property finance157 Land sold to financial institution and leased to personAdministration and payment of tax158 Responsibility for collection and management159 Annual tax on enveloped dwellings return160 Return of adjusted chargeable amount161 Return to include self assessment162 Returns, enquiries, assessments and other administrative matters163 Payment of tax164 Information and enforcement165 Collection and recovery of tax etcApplication of provisions166 Companies167 PartnershipsSupplementary provisions168 Miscellaneous amendments and transitory provision169 Orders and regulationsFinance Act 2013 (c.

7 29)viiInterpretation170 Meaning of chargeable day and within the charge 171 References to the state of affairs on a day172 Connected persons173 Connected persons: cell companies174 General interpretation of part 3 part 4 EXCISE DUTIES AND OTHER TAXESI nheritance tax175 Open- ended investment companies and authorised unit trusts176 Treatment of liabilities for inheritance tax purposes177 Election to be treated as domiciled in United Kingdom178 Transfer to spouse or civil partner not domiciled in United KingdomFuel179 Fuel duties: rates of duty and rebates from 1 April 2013 Alcohol180 Rates of alcoholic liquor dutiesTobacco181 Rates of tobacco products duty182 Meaning of tobacco products Gambling183 Rates of gaming duty184 Combined bingoAir passenger duty185 Air passenger duty: rates of duty from 1 April 2013186 Air passenger duty: miscellaneous provisionVehicle excise duty187 VED rates for light passenger vehicles, light goods vehicles, motorcycles etc188 Not exhibiting licence: period of grace189 Vehicles not kept or used on public road190 Vehicle licences for disabled peopleValue added tax191 Repayments of value added tax to health service bodies192 Valuation of certain supplies of fuel193 Reduced rate for energy-saving materialsFinance Act 2013 (c.

8 29)viiiStamp duty land tax194 Pre-completion transactions: existing cases195 Pre-completion transactions196 Relief from higher rate197 LeasesLandfill tax198 Standard rate of landfill taxClimate change levy199 Climate change levy: main rates200 Climate change levy: supplies subject to carbon price support rates etcInsurance premium tax201 Contracts that are not taxableBank levy202 Bank levy: rates from 1 January 2013203 Bank levy: rates from 1 January 2014204No deductions for UK or foreign bank levies205 High quality liquid assetsPART 5 GENERAL ANTI-ABUSE RULE206 General anti-abuse rule207 Meaning of tax arrangements and abusive 208 Meaning of tax advantage 209 Counteracting the tax advantages210 Consequential relieving adjustments211 Proceedings before a court or tribunal212 Relationship between the GAAR and priority rules213 Consequential amendment214 Interpretation of part 5215 Commencement and transitional provisionPART 6 OTHER PROVISIONST rusts216 Trusts with vulnerable beneficiaryUnit trusts217 Unauthorised unit trustsFinance Act 2013 (c.

9 29)ixResidence218 Statutory residence test219 Ordinary residenceInternational matters220 Controlled foreign companies etc221 Agreement between UK and Switzerland222 International agreements to improve tax complianceDisclosure223 Disclosure of tax avoidance schemesPowers224 Powers under Proceeds of Crime Act 2002225 Definition of goods for certain customs purposes226 Power to detain goods227 Penalty instead of forfeiture of larger ships228 Data-gathering from merchant acquirers etcPayment229 Corporation tax: deferral of payment of exit charge230 Penalties: late filing, late payment and errors231 Overpayment relief: generally prevailing practice exclusion and EU law232 Overpayment relief: time limit for claimsAdministration233 Self assessment: withdrawal of notice to file etcInterim remedies234 Restrictions on interim payments in proceedings relating to taxation mattersPART 7 FINAL PROVISIONS235 Interpretation236 Short titleSchedule 1 Annual investment allowance: periods straddling 1 January2013 or 1 January 2015 Schedule 2 Tax advantaged employee share schemesPart 1 Retirement of participantsPart 2 Good leavers (other than retirees) part 3 Material interest rulesFinance Act 2013 (c.

10 29)xPart 4 Restricted sharesPart 5 Share incentive plans: partnership sharesPart 6 Share incentive plans: dividend sharesPart 7 Share incentive plans: employee share ownership trustsPart 8 Enterprise management incentives: consequences ofdisqualifying eventsSchedule 3 Limit on income tax reliefsSchedule 4 Cash basis for small businessesPart 1 Main provisionsPart 2 Consequential amendmentsPart 3 Commencement and transitional provisionSchedule 5 Deductions allowable at a fixed rateSchedule 6 Employment income: duties performed in the UK andoverseasPart 1 Apportionment of earningsPart 2 Remittance basis of taxation: special mixed fund rulesPart 3 CommencementSchedule 7 Remittance basis: exempt propertySchedule 8 Gains from contracts for life insurance etcSchedule 9 Qualifying insurance policiesPart 1 Amendments of Schedule 15 to ICTA etcPart 2 Restricted relief qualifying policiesPart 3 Information powersSchedule 10 Transfer of assets abroadPart 1 IntroductionPart 2 New exemption for genuine transactions etcPart 3 Amendments relating to the charges under sections 720 and727 Schedule 11 Deduction of income tax at source etcSchedule 12 Disguised interestSchedule 13 Change in ownership of shell company.