Finance Act 2013

International matters

220 Controlled foreign companies etc

Schedule 47 makes provision in relation to CFCs etc.

221 Agreement between UK and Switzerland

(1) In Schedule 36 to FA 2012 (agreement between UK and Switzerland), after paragraph 26 insert—

“Transfers to HMRC under Agreement

26A (1) Income or chargeable gains of a person are to be treated as not remitted to the United Kingdom if conditions A to D are met.

(2) Condition A is that (but for sub-paragraph (1)) the income or gains would be regarded as remitted to the United Kingdom by virtue of the bringing of money to the United Kingdom.

(3) Condition B is that the money is brought to the United Kingdom pursuant to a transfer made to HMRC in accordance with the Agreement.

(4) Condition C (which applies only if the money brought to the United Kingdom is a sum levied under Article 19(2)(b)) is that the sum was levied within the period of 45 days beginning with the day on which the amount derived from the income or gain in question was remitted as mentioned in Article 19(2)(b).

(5) Condition D is that the transfer is made in relation to a tax year in which section 809B, 809D or 809E of ITA 2007 (application of remittance basis) applies to the person.

(6) Sub-paragraph (1) does not apply in relation to money brought to the United Kingdom if or to the extent that—

(a) paragraph 18(2), or section 138(4)(a) or 140(5)(a) of TIOPA 2010, is applied in relation to it (set-off against other tax liabilities), or

(b) it is repaid or refunded by HMRC.

26B (1) This paragraph applies if—

(a) but for paragraph 26A(1), income or chargeable gains would have been regarded as remitted to the United Kingdom by virtue of the bringing of money to the United Kingdom, and

(b) section 809Q of ITA 2007 (transfers from mixed funds) would have applied in determining the amount that would have been so remitted.

(2) The bringing of the money to the United Kingdom counts as an offshore transfer for the purposes of section 809R(4) of ITA 2007 (composition of mixed fund).”

(2) The amendment made by this section is to be treated as having come into force on 1 January 2013.

222 International agreements to improve tax compliance

(1) The Treasury may make regulations for, or in connection with, giving effect to or enabling effect to be given to—

(a) the agreement reached between the Government of the United Kingdom and the Government of the United States of America to improve international tax compliance and to implement FATCA, signed on 12 September 2012;

(b) any agreement modifying or supplementing that agreement;

(c) any other agreement between the Government of the United Kingdom and the government of another territory which makes provision corresponding, or substantially similar, to that made by an agreement within paragraph (a) or (b);

(d) any arrangements for the exchange of tax information in relation to the United Kingdom and any other territory which make provision corresponding, or substantially similar, to that made by an agreement within paragraph (a) or (b).

(2) Regulations under this section may in particular—

(a) authorise HMRC to require persons specified for the purposes of this paragraph (“relevant financial entities”) to provide HMRC with information of specified descriptions;

(b) require that information to be provided at such times and in such form and manner as may be specified;

(c) impose obligations on relevant financial entities (including obligations to obtain from specified persons details of their place of residence for tax purposes);

(d) make provision (including provision imposing penalties) about contravention of, or non-compliance with, the regulations;

(e) make provision about appeals in relation to the imposition of any penalty.

(3) Regulations under this section may—

(a) provide that a reference in the regulations to an agreement or arrangements to which subsection (1) refers, or a provision of such an agreement or arrangements, is to be construed as a reference to the agreement or arrangements, or provision, as amended from time to time;

(b) make different provision in relation to different periods of time;

(c) make different provision for different cases or circumstances;

(d) contain incidental, supplemental, transitional, transitory or saving provision (including provision amending any enactment).

(4) In this section—

• “FATCA” means the provisions commonly known as the Foreign Account Tax Compliance Act in the enactment of the United States of America called the Hiring Incentives to Restore Employment Act;

• “HMRC” means Her Majesty’s Revenue and Customs;

• “specified” means specified in regulations under this section.

(5) The power conferred by this section is without prejudice to any other powers conferred by or under any enactment.

(6) The power of the Treasury to make regulations under this section is exercisable by statutory instrument.

(7) Any statutory instrument containing regulations under this section is subject to annulment in pursuance of a resolution of the House of Commons.