Search Legislation

Finance (No. 2) Act 2017

 Help about what version

What Version

  • Latest available (Revised)
  • Original (As enacted)
 Help about advanced features

Advanced Features

Changes over time for: Cross Heading: TCGA 1992

 Help about opening options

Alternative versions:

Changes to legislation:

There are currently no known outstanding effects for the Finance (No. 2) Act 2017, Cross Heading: TCGA 1992. Help about Changes to Legislation

Close

Changes to Legislation

Revised legislation carried on this site may not be fully up to date. At the current time any known changes or effects made by subsequent legislation have been applied to the text of the legislation you are viewing by the editorial team. Please see ‘Frequently Asked Questions’ for details regarding the timescales for which new effects are identified and recorded on this site.

TCGA 1992U.K.

18U.K.In Schedule 5 to TCGA 1992 (provisions supplementing section 86 of TCGA 1992), after paragraph 5 insert—

5A(1)Section 86 does not apply in relation to a year (“the particular year”) if Conditions A to D are met.

(2)Condition A is that the particular year is—

(a)the tax year 2017-18, or

(b)a later tax year.

(3)Condition B is that when the settlement is created the settlor—

(a)is not domiciled in the United Kingdom, and

(b)if the settlement is created on or after 6 April 2017, is not deemed domiciled in the United Kingdom.

(4)Condition C is that there is no time in the particular year when the settlor is—

(a)domiciled in the United Kingdom, or

(b)deemed domiciled in the United Kingdom by virtue of Condition A in section 835BA of ITA 2007.

(5)Condition D is that no property or income is provided directly or indirectly for the purposes of the settlement by the settlor, or by the trustees of another settlement of which the settlor is the settlor or a beneficiary, at a time in the relevant period when the settlor is—

(a)domiciled in the United Kingdom, or

(b)deemed domiciled in the United Kingdom.

(6)In sub-paragraph (5) “relevant period” means the period—

(a)beginning with the start of 6 April 2017 or, if later, the creation of the settlement, and

(b)ending with the end of the particular year.

(7)For the purposes of Condition D, the addition of value to property comprised in the settlement is to be treated as the direct provision of property for the purposes of the settlement.

(8)Paragraph 5B contains further provision for the purposes of Condition D.

(9)In this paragraph “deemed domiciled” means regarded for the purposes of section 86(1)(c) as domiciled in the United Kingdom as a result of section 835BA of ITA 2007 having effect.

5B(1)This paragraph applies for the purposes of Condition D in paragraph 5A.

(2)Ignore—

(a)property or income provided under a transaction, other than a loan, where the transaction is entered into on arm's length terms,

(b)property or income provided, otherwise than under a loan, without any intention by the person providing it to confer a gratuitous benefit on any person,

(c)the principal of a loan which is made to the trustees of the settlement on arm's length terms,

(d)the payment of interest to the trustees of the settlement under a loan made by them on arm's length terms,

(e)repayment to the trustees of the settlement of the principal of a loan made by them,

(f)property or income provided in pursuance of a liability incurred by any person before 6 April 2017, and

(g)where the settlement's expenses relating to taxation and administration for a tax year exceed its income for that year, property or income provided towards meeting that excess if the value of any such property and income is not greater than the amount of—

(i)the excess, or

(ii)if greater, the amount by which such expenses exceed the amount of such expenses which may be paid out of the settlement's income.

(3)Where—

(a)a loan is made to the trustees of the settlement by the settlor or the trustees of a settlement connected with the settlor, and

(b)the loan is on arm's length terms, but

(c)a relevant event occurs,

the principal of the loan is to be regarded as having been provided to the trustees at the time of that event (despite sub-paragraph (2)).

(4)In sub-paragraph (3) “relevant event” means—

(a)capitalisation of interest payable under the loan,

(b)any other failure to pay interest in accordance with the terms of the loan, or

(c)variation of the terms of the loan such that they cease to be arm's length terms.

(5)Sub-paragraph (6) applies (subject to sub-paragraph (7)) where—

(a)the settlor becomes deemed domiciled in the United Kingdom on or after 6 April 2017,

(b)before the date on which the settlor becomes deemed domiciled in the United Kingdom ( “ the deemed domicile date ”), a loan has been made to the trustees of the settlement by—

(i)the settlor, or

(ii)the trustees of a settlement connected with the settlor,

(c)the loan is not entered into on arm's length terms, and

(d)any amount that is outstanding under the loan on the deemed domicile date (“the outstanding amount”) is payable or repayable on demand on or after that date.

(6)Where this sub-paragraph applies, the outstanding amount is to be regarded as property directly provided on the deemed domicile date by the lender for the purposes of the settlement (despite sub-paragraph (2)).

(7)But if the deemed domicile date is 6 April 2017, sub-paragraph (6) does not apply if—

(a)the principal of the loan is repaid, and all interest payable under the loan is paid, before 6 April 2018, or

(b)the loan becomes a loan on arm's length terms before 6 April 2018 and—

(i)before that date interest is paid to the lender in respect of the period beginning with 6 April 2017 and ending with 5 April 2018 as if those arm's length terms had been terms of the loan in relation to that period, and

(ii)interest continues to be payable from 6 April 2018 in accordance with those terms.

(8)For the purposes of this paragraph a loan is on “arm's length terms”—

(a)in the case of a loan made to the trustees of a settlement, only if interest at the official rate or more is payable at least annually under the loan;

(b)in the case of a loan made by the trustees of a settlement, only if any interest payable under the loan is payable at no more than the official rate.

(9)For the purposes of this paragraph—

  • a settlement is “connected” with a person if the person is the settlor or a beneficiary of it;

  • deemed domiciled” has the same meaning as in paragraph 5A;

  • official rate”, in relation to interest, means the rate of interest applicable from time to time under section 178 of the Finance Act 1989 for the purposes of Chapter 7 of Part 3 of ITEPA 2003.

Back to top

Options/Help

Print Options

You have chosen to open The Whole Act

The Whole Act you have selected contains over 200 provisions and might take some time to download. You may also experience some issues with your browser, such as an alert box that a script is taking a long time to run.

Would you like to continue?

You have chosen to open The Whole Act as a PDF

The Whole Act you have selected contains over 200 provisions and might take some time to download.

Would you like to continue?

You have chosen to open the Whole Act

The Whole Act you have selected contains over 200 provisions and might take some time to download. You may also experience some issues with your browser, such as an alert box that a script is taking a long time to run.

Would you like to continue?

You have chosen to open Schedules only

The Schedules you have selected contains over 200 provisions and might take some time to download. You may also experience some issues with your browser, such as an alert box that a script is taking a long time to run.

Would you like to continue?

Close

Legislation is available in different versions:

Latest Available (revised):The latest available updated version of the legislation incorporating changes made by subsequent legislation and applied by our editorial team. Changes we have not yet applied to the text, can be found in the ‘Changes to Legislation’ area.

Original (As Enacted or Made): The original version of the legislation as it stood when it was enacted or made. No changes have been applied to the text.

Close

See additional information alongside the content

Geographical Extent: Indicates the geographical area that this provision applies to. For further information see ‘Frequently Asked Questions’.

Show Timeline of Changes: See how this legislation has or could change over time. Turning this feature on will show extra navigation options to go to these specific points in time. Return to the latest available version by using the controls above in the What Version box.

Close

Opening Options

Different options to open legislation in order to view more content on screen at once

Close

More Resources

Access essential accompanying documents and information for this legislation item from this tab. Dependent on the legislation item being viewed this may include:

  • the original print PDF of the as enacted version that was used for the print copy
  • lists of changes made by and/or affecting this legislation item
  • confers power and blanket amendment details
  • all formats of all associated documents
  • correction slips
  • links to related legislation and further information resources
Close

Timeline of Changes

This timeline shows the different points in time where a change occurred. The dates will coincide with the earliest date on which the change (e.g an insertion, a repeal or a substitution) that was applied came into force. The first date in the timeline will usually be the earliest date when the provision came into force. In some cases the first date is 01/02/1991 (or for Northern Ireland legislation 01/01/2006). This date is our basedate. No versions before this date are available. For further information see the Editorial Practice Guide and Glossary under Help.

Close

More Resources

Use this menu to access essential accompanying documents and information for this legislation item. Dependent on the legislation item being viewed this may include:

  • the original print PDF of the as enacted version that was used for the print copy
  • correction slips

Click 'View More' or select 'More Resources' tab for additional information including:

  • lists of changes made by and/or affecting this legislation item
  • confers power and blanket amendment details
  • all formats of all associated documents
  • links to related legislation and further information resources