On 19 July, the government tabled the following amendments for report stage, which will take place in the House of Commons on 5 September 2016:
cl 5 and Sch 1 (dividend nil rate and abolition of dividend tax credits etc.) – amendment 138: This amendment includes a change to a trust’s ‘type 4 income’ (income on which tax is charged at the basic rate), as defined by ITA 2007 s 498, to ensure that all tax paid on dividend income within the first £1,000 of income goes into the tax pool. This means that all of the tax paid on dividends by trustees of discretionary and accumulation trusts will go into the tax pool;
cl 18 (employment income provided through third parties) – amendments 132 to 134: These amendments extend until 1 April 2017 the date for withdrawal of the transitional relief available in respect of investment growth in tax avoidance schemes using employee benefit trusts (EBTs). Clause 18 currently withdraws this transitional relief, introduced as part of the EBT settlement opportunity, for anyone who has not settled with HMRC before 1 December 2016. The amendments will replace references to ‘1 December 2016’ with ‘1 April 2017’. The reason given for the extension is to ensure that all those who want to reach a settlement with HMRC before the deadline have sufficient time to do so, in order to benefit from the relief;
cl 31 (VCTs: requirements for giving approval) – amendment 135: This amendment adds short term deposits of money, including bank deposits, to the list of non-qualifying investments a venture capital trust may make. The amendment has effect for deposits made on or after 6 April 2016;
cl 65 and Sch 10 (hybrid and other mismatches) – amendments 1 to 131: These amendments take into account a number of issues raised since legislation was first published at Budget 2016. In particular, the amendments adjust the scope of the hybrid and other mismatch rules in relation to permanent establishments (PEs), in order to preserve the existing treatment of certain PE losses, and to clarify the interaction with the existing UK foreign PE exemption rules. There are also a number of technical amendments which ensure that the legislation operates as intended;
cl 152 and Sch 17 (fuel duties: aqua methanol, etc.) – amendment 139: This amendment changes the commencement date for the reduced rate of duty for aqua methanol from 1 October 2016 to 14 November 2016. This is to take account of the delayed passage of the Finance Bill and to allow for regulations to be made before the new duty rate for aqua methanol comes into effect; and
cl 155 (general anti-abuse rule: provisional counteractions) – amendments 136 and 137: These amendments make a small change to include a ‘pooling notice’ within the provisional counteraction rules.
The third reading will follow on 6 September, after which no further amendments can be made. The Bill will go through its House of Lords stages on 13 September. royal assent must be given by 16 October at the latest.
On 19 July, the government tabled the following amendments for report stage, which will take place in the House of Commons on 5 September 2016:
cl 5 and Sch 1 (dividend nil rate and abolition of dividend tax credits etc.) – amendment 138: This amendment includes a change to a trust’s ‘type 4 income’ (income on which tax is charged at the basic rate), as defined by ITA 2007 s 498, to ensure that all tax paid on dividend income within the first £1,000 of income goes into the tax pool. This means that all of the tax paid on dividends by trustees of discretionary and accumulation trusts will go into the tax pool;
cl 18 (employment income provided through third parties) – amendments 132 to 134: These amendments extend until 1 April 2017 the date for withdrawal of the transitional relief available in respect of investment growth in tax avoidance schemes using employee benefit trusts (EBTs). Clause 18 currently withdraws this transitional relief, introduced as part of the EBT settlement opportunity, for anyone who has not settled with HMRC before 1 December 2016. The amendments will replace references to ‘1 December 2016’ with ‘1 April 2017’. The reason given for the extension is to ensure that all those who want to reach a settlement with HMRC before the deadline have sufficient time to do so, in order to benefit from the relief;
cl 31 (VCTs: requirements for giving approval) – amendment 135: This amendment adds short term deposits of money, including bank deposits, to the list of non-qualifying investments a venture capital trust may make. The amendment has effect for deposits made on or after 6 April 2016;
cl 65 and Sch 10 (hybrid and other mismatches) – amendments 1 to 131: These amendments take into account a number of issues raised since legislation was first published at Budget 2016. In particular, the amendments adjust the scope of the hybrid and other mismatch rules in relation to permanent establishments (PEs), in order to preserve the existing treatment of certain PE losses, and to clarify the interaction with the existing UK foreign PE exemption rules. There are also a number of technical amendments which ensure that the legislation operates as intended;
cl 152 and Sch 17 (fuel duties: aqua methanol, etc.) – amendment 139: This amendment changes the commencement date for the reduced rate of duty for aqua methanol from 1 October 2016 to 14 November 2016. This is to take account of the delayed passage of the Finance Bill and to allow for regulations to be made before the new duty rate for aqua methanol comes into effect; and
cl 155 (general anti-abuse rule: provisional counteractions) – amendments 136 and 137: These amendments make a small change to include a ‘pooling notice’ within the provisional counteraction rules.
The third reading will follow on 6 September, after which no further amendments can be made. The Bill will go through its House of Lords stages on 13 September. royal assent must be given by 16 October at the latest.
