Finance Act 2015 - legislation

1 Finance Act 2015 CHAPTER 11 ACT 2015 Published by TSO (The Stationery Office) and available , Telephone, Fax & E-mailTSOPO Box 29, Norwich, NR3 1 GNTelephone orders/General enquiries: 0870 600 5522 Fax orders: 0870 600 5533E-mail: 0870 240 3701 The Houses of Parliament Shop12 Bridge Street, Parliament SquareLondon SW1A 2 JXTelephone orders/General enquiries: 020 7219 3890 Fax orders: 020 7219 3866 Email: @Blackwell and other Accredited AgentsFinance Act 2015 CHAPTER 11 CONTENTSPART 1 INCOME TAX, CORPORATION TAX AND CAPITAL GAINS TAXCHAPTER 1 CHARGE, RATES ETCI ncome tax1 Charge and rates for 2015 -162 Limits and allowances for 2015 -163 Personal allowances for 2015 -164 Basic rate limit from 20165 Personal allowance from 2016 Corporation tax6 Charge for financial year 2016 CHAPTER 2 INCOME TAX: GENERAL7 Cars: the appropriate percentage for 2017-188 Cars: the appropriate percentage for subsequent tax years9 Diesel cars: the appropriate percentage for 2015 -1610 Zero-emission vans11 Exemption for amounts which would otherwise be deductible12 Abolition of dispensation regime13 Extension of benefits code except in relation to certain ministers of religion14 Exemption for board or lodging provided to carers15 Lump sums provided under armed forces early departure schemeFinance Act 2015 (c.)

2 11)ii16 Bereavement support payment: exemption from income tax17 PAYE: benefits in kind18 Employment intermediaries: determination of penalties19 Arrangements offering a choice of capital or income return20 Intermediaries and Gift Aid21 Disguised investment management fees22 Miscellaneous loss relief23 Exceptions from duty to deduct tax: qualifying private placements24 Increased remittance basis chargeCHAPTER 3 CORPORATION TAX: GENERAL25 Loan relationships: repeal of certain provisions relating to late interest etc26 Intangible fixed assets: goodwill etc acquired from a related party27 Amount of relief for expenditure on research and development28 Expenditure on research and development: consumable items29 Film tax relief30 Reliefs for makers of children s television programmes31 Television tax relief32 Restrictions applying to certain deductions made by banking companies33 Tax avoidance involving carried-forward lossesCHAPTER 4 OTHER PROVISIONSP ensions34 Pension flexibility: annuities etcFlood and coastal defence35 Relief for contributions to flood and coastal erosion risk management projectsInvestment reliefs36 Investment reliefs: excluded activitiesCapital gains tax37 Disposals of UK residential property interests by non-residents etc38 Relevant high value disposals: gains and losses39 Private residence relief40 Wasting assets41 Entrepreneurs relief: associated disposals42 Entrepreneurs relief: exclusion of goodwill in certain circumstances43 Entrepreneurs relief: trading company etc44 Deferred entrepreneurs relief on invested gainsCapital allowances45 Zero-emission goods vehiclesFinance Act 2015 (c.

3 11)iii46 Plant and machinery allowances: anti-avoidanceOil and gas47 Extension of ring fence expenditure supplement48 Reduction in rate of supplementary charge49 Supplementary charge: investment allowance50 Supplementary charge: cluster area allowance51 Amendments relating to investment allowance and cluster area allowancePART 2 EXCISE DUTIES AND OTHER TAXESP etroleum revenue tax52 Reduction in rate of petroleum revenue taxAlcohol53 Rates of alcoholic liquor duties54 Wholesaling of controlled liquorTobacco55 Rates of tobacco products duty56 Excise duty on tobacco: anti-forestalling restrictionsAir passenger duty57 Air passenger duty: exemption for children in standard classVehicle excise duty58 VED rates for light passenger vehicles and motorcycles59 VED: extension of old vehicles exemption from 1 April 2016 Gaming duty60 Rates of gaming dutyAggregates levy61 Tax credit in Northern IrelandClimate change levy62 Climate change levy: main rates from 1 April 201663 Combined heat and power stationsLandfill tax64 Landfill tax: rates from 1 April 201665 Landfill tax: material consisting of finesFinance Act 2015 (c.

4 11)ivValue added tax66 VAT: refunds to certain charities67 VAT: refunds to strategic highways companiesStamp duty land tax68 SDLT: alternative property Finance relief69 SDLT: multiple dwellings reliefAnnual tax on enveloped dwellings70 ATED: annual chargeable amount71 ATED: taxable value72 ATED: interests held by connected persons73 ATED: returnsInheritance tax74 Inheritance tax: exemption for decorations and other awards75 Inheritance tax: exemption for emergency service personnel etcThe bank levy76 The bank levy: rates from 1 April 2015 PART 3 DIVERTED PROFITS TAXI ntroduction and overview77 Introduction to the tax78 Overview of Part 3 Charge to tax79 Charge to taxInvolvement of entities or transactions lacking economic substance80UK company: involvement of entities or transactions lacking economicsubstance81 Non-UK company: involvement of entities or transactions lacking economicsubstanceCalculation of taxable diverted profits: section 80 or 81 cases82 Calculation of taxable diverted profits in section 80 or 81 case: introduction83 Section 80 or 81 cases where no taxable diverted profits arise84 Section 80 or 81: calculation of profits by reference to the actual provision85 Section 80 or 81: calculation of profits by reference to the relevant alternativeprovisionFinance Act 2015 (c.

5 11)vAvoidance of a UK taxable presence86 Non-UK company avoiding a UK taxable presence87 Exception for companies with limited UK-related sales or expensesCalculation of taxable diverted profits: section 86 cases88 Calculation of taxable diverted profits in section 86 case: introduction89 Section 86: calculation of profits where only tax avoidance condition is met90 Section 86: mismatch condition is met: calculation of profits by reference tothe actual provision91 Section 86: mismatch condition is met: calculation of profits by reference tothe relevant alternative provisionDuty to notify if within scope92 Duty to notify if potentially within scope of taxProcess for imposing charge93 Preliminary notice94 Representations95 Charging notice96 Section 80 or 81 cases: estimating profits for preliminary and charging notices97 Section 86 cases: estimating profits for preliminary and charging noticesPayment and recovery of tax98 Payment of tax99 Diverted profits tax ignored for tax purposes100 Credit for UK or foreign tax on same profitsReview and appeals101 HMRC review of charging notice102 Appeal against charging notice or supplementary charging noticeAdministration of tax103 Responsibility for collection and management104 Penalties etc105 Information and inspection powers etcInterpretation106 The participation condition 107 Effective tax mismatch outcome 108 Provision supplementing section 107109 Excepted loan relationship outcome 110 The insufficient economic substance condition 111 Transaction and series of transactions 112 Treatment of a person who is a member of a partnership113 Accounting period and corresponding accounting period 114 Other defined terms in Part 3 Finance Act 2015 (c.

6 11)viFinal provisions115 Application of other enactments to diverted profits tax116 Commencement and transitional provisionPART 4 OTHER PROVISIONSAnti-avoidance117 Disclosure of tax avoidance schemes118 Accelerated payments and group relief119 Promoters of tax avoidance schemes120 Penalties in connection with offshore matters and offshore transfers121 Penalties in connection with offshore asset movesOther tax-related matters122 Country-by-country reporting123 Status for tax purposes of certain bodiesGovernment stock124 Redemption of undated government stocksPART 5 FINAL PROVISIONS125 Commencement orders and regulations126 Interpretation127 Short titleSchedule 1 Extension of benefits code except in relation to certainministers of religionPart 1 Amendments of ITEPA 2003 Part 2 Amendments of other enactmentsSchedule 2 Restrictions applying to certain deductions made by bankingcompaniesPart 1 Main provisionsPart 2 Consequential amendmentsPart 3

7 Commencement and anti-forestalling provisionSchedule 3 Tax avoidance involving carried-forward lossesPart 1 Amendments of CTA 2010 Part 2 CommencementSchedule 4 Pension flexibility: annuities etcPart 1 Death benefits for nominees, successors and dependantsPart 2 Income tax on beneficiaries annuities etcSchedule 5 Relief for contributions to flood and coastal erosion riskmanagement projectsFinance Act 2015 (c. 11)viiSchedule 6 Investment reliefs: excluded activitiesPart 1 Part 5B of ITA 2007: amendment coming into force on passingof ActPart 2 Part 5 of ITA 2007: excluded activities from 6 April 2015 Part 3 Part 6 of ITA 2007: excluded activities from 6 April 2015 Part 4 Further amendments of Parts 5 to 6 of ITA 2007 Schedule 7 Disposals of UK residential property interests by non-residents etcPart 1 Amendments of TCGA 1992 Part 2 Other amendmentsPart 3 CommencementSchedule 8 Relevant high value disposals: gains and lossesSchedule 9 Private residence reliefSchedule 10 Plant and machinery allowances: anti-avoidanceSchedule 11 Extension of ring fence expenditure supplementSchedule 12 Supplementary charge: investment allowancePart 1 Amendments of Part 8 of CTA 2010 Part 2 Commencement and transitional provisionSchedule 13 Supplementary charge.

8 Cluster area allowancePart 1 Amendments of Part 8 of CTA 2010 Part 2 Transitional provisionSchedule 14 Investment allowance and cluster area allowance: furtheramendmentsPart 1 Amendments of CTA 2010 Part 2 CommencementSchedule 15 Landfill tax: material consisting of finesSchedule 16 Recovery of unpaid diverted profits tax due from non-UKresident companyPart 1 Imposing liability on UK representative of non-UK residentcompanyPart 2 Recovery of diverted profits tax from related companiesSchedule 17 Disclosure of tax avoidance schemesSchedule 18 Accelerated payments: group reliefSchedule 19 Promoters of tax avoidance schemesSchedule 20 Penalties in connection with offshore matters and offshoretransfersSchedule 21 Penalties in connection with offshore asset movesELIZABETH IIc. 11 Finance Act 20152015 CHAPTER 11An Act to grant certain duties, to alter other duties, and to amend the lawrelating to the National Debt and the Public Revenue, and to make furtherprovision in connection with Finance .

9 [26th March 2015 ]Most Gracious SovereignE, Your Majesty s most dutiful and loyal subjects, the Commons of theUnited Kingdom in Parliament assembled, towards raising the necessarysupplies to defray Your Majesty s public expenses, and making an addition to thepublic revenue, have freely and voluntarily resolved to give and to grant unto YourMajesty the several duties hereinafter mentioned; and do therefore most humblybeseech Your Majesty that it may be enacted, and be it enacted by the Queen s mostExcellent Majesty, by and with the advice and consent of the Lords Spiritual andTemporal, and Commons, in this present Parliament assembled, and by the authorityof the same, as follows: PART 1 INCOME TAX, CORPORATION TAX AND CAPITAL GAINS TAXCHAPTER 1 CHARGE, RATES ETCI ncome tax1 Charge and rates for 2015 -16(1)Income tax is charged for the year Act 2015 (c. 11)Part 1 Income tax, corporation tax and capital gains taxChapter 1 Charge, rates etc2(2)For that tax year (a)the basic rate is 20%,(b)the higher rate is 40%, and(c)the additional rate is 45%.

10 2 Limits and allowances for 2015 -16(1)For the tax year 2015 -16 (a)the amount specified in section 37(2) of ITA 2007 (income limit forpersonal allowance for those born before 6 April 1938) is replaced with 27,700 ,(b)the amount specified in section 38(1) of that Act (blind person sallowance) is replaced with 2,290 ,(c)the amount specified in section 43 of that Act ( minimum amount forcalculating tax reductions for married couples and civil partners) isreplaced with 3,220 ,(d)the amount specified in section 45(3)(a) of that Act (amount forcalculating allowance in relation to marriages before 5 December 2005where spouse is 75 over) is replaced with 8,355 ,(e)the amount specified in section 45(4) of that Act (income limit forcalculating allowance in relation to marriages before 5 December 2005)is replaced with 27,700 ,(f)the amount specified in section 46(3)(a) of that Act (amount forcalculating allowance in relation to marriages and civil partnerships onor after 5 December 2005 where spouse or civil partner is 75 or over) isreplaced with 8,355 , and(g)the amount specified in section 46(4) of that Act (income limit forcalculating allowance in relation to marriages and civil partnerships onor after 5 December 2005) is replaced with 27,700.