Finance Act 2016 - Legislation.gov.uk

1 Finance Act 2016 CHAPTER 24 ACT 2016 Published by TSO (The Stationery Office), part of Williams Lea Tag, and available , Telephone, Fax & E-mailTSOPO Box 29, Norwich, NR3 1 GNTelephone orders/General enquiries: 0333 202 5070 Fax orders: 0333 202 5080E-mail: 0333 202 5077 TSO@Blackwell and other Accredited Agents57027 Chapter 24 2016_Cover 32mm 116/09/ 2016 13:48 Finance Act 2016 CHAPTER 24 CONTENTSPART 1 INCOME TAXC harge and principal rates etc1 Income tax charge and rates for 2016 -172 Basic rate limit for 2017-183 Personal allowance for 2017-18 Rate structure4 Savings allowance, and savings nil rate etc5 Rates of tax on dividend income, and abolition of dividend tax credits etc6 Structure of income tax ratesEmployment income: taxable benefits7 Taxable benefits: application of Chapters 5 to 7 of Part 3 of ITEPA 20038 Cars: appropriate percentage for 2019-20 and subsequent tax years9 Cars which cannot emit CO2: appropriate percentage for 2017-18 and 2018-1910 Diesel cars.

2 Appropriate percentage11 Cash equivalent of benefit of a van12 Tax treatment of payments from sporting testimonials13 Exemption for trivial benefits provided by employers14 Travel expenses of workers providing services through intermediaries15 Taxable benefits: PAYEE mployment income: other provision16 Employee share schemes17 Securities options18 Employment income provided through third partiesFinance Act 2016 (c. 24)iiPensions19 Standard lifetime allowance from 2016 -1720 Pensions bridging between retirement and state pension21 Dependants scheme pensions22 Pension flexibility23 Netherlands Benefit Act for Victims of Persecution 1940-1945 Trading and other income24 Fixed-rate deductions for use of home for business purposes25 Averaging profits of farmers etc26 Relief for Finance costs related to residential property businesses27 Individual investment plans of deceased investorsReliefs: enterprise investment scheme, venture capital trusts etc28 EIS, SEIS and VCTs: exclusion of energy generation29 EIS and VCTs.

3 Definition of certain periods30 EIS and VCTs: election31 VCTs: requirements for giving approvalReliefs: peer-to-peer lending32 Income tax relief for irrecoverable peer-to-peer loansTransactions in securities33 Transactions in securities: company distributions34 Transactions in securities: procedure for counteraction of advantage35 Distributions in a winding upDisguised fees and carried interest36 Disguised investment management fees37 Income-based carried interest38 Income-based carried interest: persons coming to the UKDeduction at source39 Deduction of income tax at source40 Deduction of income tax at source: intellectual property41 Deduction of income tax at source: intellectual property - tax avoidanceReceipts from intellectual property42 Receipts from intellectual property: territorial scope43 Receipts from intellectual property: diverted profits taxSupplementary welfare payments: Northern Ireland44 Tax treatment of supplementary welfare payments: Northern IrelandFinance Act 2016 (c.)

4 24)iiiPART 2 CORPORATION TAXC harge and rates45 Charge for financial year 201746 Rate of corporation tax for financial year 2020 Research and development47 Abolition of vaccine research relief48 Cap on R&D aidLoan relationships49 Loan relationships and derivative contracts50 Loans to participators etc: rate of tax51 Loans to participators etc: trustees of charitable trustsIntangible fixed assets52 Intangible fixed assets: pre-FA 2002 assets53 Intangible fixed assets: transfers treated as at market valueCreative industry reliefs54 Tax relief for production of orchestral concerts55 Television and video games tax relief: consequential amendmentsBanking companies56 Banking companies: excluded entities57 Banking companies: restrictions on loss relief etcOil and gas58 Reduction in rate of supplementary charge59 Investment allowance: disqualifying conditions60 Investment allowance: power to expand meaning of relevant income 61 Onshore allowance: disqualifying conditions62 Cluster area allowance: disqualifying conditions63 Cluster area allowance.

5 Power to expand meaning of relevant income Exploitation of patents etc64 Profits from the exploitation of patents etcMiscellaneous65 Power to make regulations about the taxation of securitisation companies66 Hybrid and other mismatches67 Insurance companies carrying on long-term business68 Taking over payment obligations as lessee of plant or machineryFinance Act 2016 (c. 24)ivPART 3 INCOME TAX AND CORPORATION TAXC apital allowances69 Capital allowances: designated assisted areas70 Capital allowances: anti-avoidance relating to disposalsTrade and property business profits71 Trade and property business profits: money s worth72 Replacement and alteration of toolsProperty business deductions73 Property business deductions: replacement of domestic items74 Property business deductions: wear and tear allowanceTransfer pricing75 Transfer pricing: application of OECD principlesTransactions in UK land76 Corporation tax: territorial scope etc77 Corporation tax: transactions in UK land78 Income tax.

6 Territorial scope etc79 Income tax: transactions in UK land80 Pre-trading expenses81 Commencement and transitional provision: sections 76, 77 and 8082 Commencement and transitional provision: sections 78 and 79 PART 4 CAPITAL GAINS TAXRate83 Reduction in rate of capital gains taxEntrepreneurs' relief84 Entrepreneurs relief: associated disposals85 Entrepreneurs relief: disposal of goodwill86 Entrepreneurs relief: trading company and trading group Investors' relief87 Investors reliefEmployee shareholder shares88 Employee shareholder shares: limit on exemptionFinance Act 2016 (c. 24)v89 Employee shareholder shares: disguised fees and carried interestOther provisions90 Disposals of UK residential property by non-residents etc91 NRCGT returns92 Addition of CGT to Provisional Collection of Taxes Act 1968 PART 5 INHERITANCE TAX ETC93 Inheritance tax: increased nil-rate band94 Inheritance tax: pension drawdown funds95 Inheritance tax: victims of persecution during Second World War era96 Inheritance tax: gifts for national purposes etc97 Estate duty.

7 Objects of national, scientific, historic or artistic interestPART 6 APPRENTICESHIP LEVYB asic provisions98 Apprenticeship levy99 Charge to apprenticeship levy100A person s pay bill for a tax yearConnected companies and charities101 Connected companies102 Connected charitiesAnti-avoidance103 Anti-avoidance104 Application of other regimes to apprenticeship levyPayment, collection and recovery105 Assessment, payment etc106 Recovery from third parties107 Real time information108 Time limits for assessment109No deduction in respect of levy to be made from earnings110 Collectors and court proceedingsInformation and penalties111 Records112 Information and inspection powers113 PenaltiesFinance Act 2016 (c.)

8 24)viAppeals114 AppealsGeneral115 Tax agents: dishonest conduct116 Provisional collection of apprenticeship levy117 Crown application118 Charities which are connected with one another119 Connection between charities: further provision120 General interpretation121 RegulationsPART 7 VAT122 VAT: power to provide for persons to be eligible for refunds123 VAT: representatives and security124 VAT: joint and several liability of operators of online marketplaces125 VAT: Isle of Man charities126 VAT: women s sanitary productsPART 8 SDLT AND ATEDS tamp duty land tax127 SDLT: calculating tax on non-residential and mixed transactions128 SDLT: higher rates for additional dwellings etc129 SDLT higher rate: land purchased for commercial use130 SDLT higher rate: acquisition under regulated home reversion plan131 SDLT higher rate: properties occupied by certain employees etc132 SDLT: minor amendments of section 55 of FA 2003133 SDLT: property authorised investment funds and co-ownership authorisedcontractual schemesAnnual tax on enveloped dwellings134 ATED: regulated home reversion plans135 ATED: properties occupied by certain employees etc136 ATED.

9 Alternative property Finance - land in ScotlandPART 9 OTHER TAXES AND DUTIESS tamp duty and stamp duty reserve tax137 Stamp duty: acquisition of target company s share capital138 Stamp duty: transfers to depositaries or providers of clearance services139 SDRT: transfers to depositaries or providers of clearance servicesFinance Act 2016 (c. 24)viiPetroleum revenue tax140 Petroleum revenue tax: rateInsurance premium tax141 Insurance premium tax: standard rateLandfill tax142 Landfill tax: rates from 1 April 2017143 Landfill tax: rates from 1 April 2018 Climate change levy144 CCL: abolition of exemption for electricity from renewable sources145 CCL: main rates from 1 April 2017146 CCL: main rates from 1 April 2018147 CCL: main rates from 1 April 2019148 CCL: reduced rates from 1 April 2019 Air passenger duty149 APD: rates from 1 April 2016 Vehicle excise duty150 VED: rates for light passenger vehicles, light goods vehicles, motorcycles etc151 VED.

10 Extension of old vehicles exemption from 1 April 2017 Other excise duties152 Gaming duty: rates153 Fuel duties: aqua methanol etc154 Tobacco products duty: rates155 Alcoholic liquor duties: ratesPART 10 TAX AVOIDANCE AND EVASIONG eneral anti-abuse rule156 General anti-abuse rule: provisional counteractions157 General anti-abuse rule: binding of tax arrangements to lead arrangements158 General anti-abuse rule: penaltyTackling frequent avoidance159 Serial tax avoidance160 Promoters of tax avoidance schemes161 La