Finance Act 2013

[F1 PART 4 U.K. Pooling notices and notices of binding

Textual Amendments

F1 Sch. 43D inserted (with effect in accordance with s. 124(2) of the amending Act) by Finance Act 2021 (c. 26), Sch. 32 para. 1

Power to give pooling notice or notice of binding to responsible partner U.K.

10 (1) If a designated HMRC officer— U.K.

(a) has the power to give to a person (“R”) a pooling notice under paragraph 1(3) or a notice of binding under paragraph 2(2) of Schedule 43A in respect of a tax advantage arising from tax arrangements (“R's arrangements”), and

(b) considers that a partnership return has been made on the basis that the tax advantage has arisen to R, or to R and one or more of R's partners, from R's arrangements,

the officer may give the pooling notice or notice of binding to the responsible partner under this paragraph.

(2) A partner (including R) who appears to a designated HMRC officer to fall within sub-paragraph (1)(b) is a “relevant partner” for the purposes of this Part of this Schedule.

(3) If, after the notice has been given, it appears to a designated HMRC officer that the tax advantage has not in fact arisen to a partner specified in the notice, the officer must amend the notice accordingly.

(4) Where a designated HMRC officer so amends the notice—

(a) it is treated as having been given in the amended form, and

(b) the officer may take such other steps as the officer considers appropriate.

(5) The officer may not give a pooling notice under this paragraph if a notice under paragraph 5 has been given in respect of R's arrangements.

(6) The officer may not give a notice of binding under this paragraph if, in respect of R's arrangements, one of the following notices has been given—

(a) a pooling notice under this paragraph, or

(b) a notice under paragraph 5.

Effect of giving notice under paragraph 10 U.K.

11 U.K. Where a pooling notice or notice of binding is given to the responsible partner under paragraph 10, this Part of this Act has effect in relation to the tax advantage with the modifications in paragraphs 12 and 13.

Modifications to Schedule 43A U.K.

12 (1) Schedule 43A (procedural requirements: pooling notices and notices of binding) has effect with the following modifications. U.K.

(2) Paragraph 1 is to be read as if, in sub-paragraph (3A), after “lead arrangements” there were inserted “ (whether under this Schedule or Schedule 43D) ”.

(3) Paragraph 3 is to be read as if—

(a) in sub-paragraph (2)(a), after “specify” there were inserted “ each relevant partner, ”,

(b) in sub-paragraph (2)(c), for “R” there were substituted “ each relevant partner ”, and

(c) in sub-paragraph (3), for “R may” there were substituted “ may be taken ”.

(4) Schedule 43A is to be read as if, for paragraph 4 (and the heading before it), there were substituted—

“Corrective action by responsible partner U.K.

4 (1) Where, in respect of a partnership—

(a) a designated HMRC officer gives a pooling notice or notice of binding under paragraph 10 of Schedule 43D in respect of a tax advantage arising to one or more partners,

(b) the closed period mentioned in section 209(9) has not begun, and

(c) the responsible partner—

(i) amends a partnership return or claim to counteract the tax advantage, and

(ii) notifies HMRC of that fact,

the responsible partner is treated for the purposes of paragraphs 6 to 9 and Schedule 43B as not having been given the notice in question.

(2) Where a tax enquiry is in progress, no enactment limiting the time during which amendments may be made to returns or claims operates to prevent the responsible partner taking the action mentioned in sub-paragraph (1) before the enquiry is closed.

(3) No appeal may be brought, by virtue of a provision mentioned in sub-paragraph (4), against an amendment made by a closure notice in respect of a tax enquiry, to the extent that the amendment takes into account an amendment made by the responsible partner to a return or claim as mentioned in sub-paragraph (1)(c).

(4) The provisions are—

(a) section 31(1)(b) or (c) of TMA 1970,

(b) paragraph 9 of Schedule 1A to TMA 1970.

Corrective action by relevant partners U.K.

4A (1) Where, in respect of a partnership—

(a) a designated HMRC officer gives a pooling notice or notice of binding under paragraph 10 of Schedule 43D in respect of a tax advantage arising to one or more partners,

(b) the closed period mentioned in section 209(9) has not begun, and

(c) a partner mentioned in paragraph (a) takes all necessary action to enter into an agreement with HMRC (in writing) for the purpose of relinquishing the tax advantage,

the partner is not to be treated as a relevant partner for the purposes of Part 4 of Schedule 43D.

(2) As soon as is practicable after the beginning of the closed period, the pooling notice or notice of binding must be amended by a designated HMRC officer so each partner to whom sub-paragraph (1) applies is no longer specified in it.

(3) Where a notice is amended in accordance with sub-paragraph (2), the notice is treated for the purposes of paragraphs 6 to 9 and Schedule 43B as having been given in the amended form.

(4) If a partner to whom sub-paragraph (1) applies fails to enter into the written agreement, HMRC may proceed as if that sub-paragraph had not applied in relation to the partner (and accordingly, as if the partner were a relevant partner).”

(5) Paragraph 7(3)(a) is to be read as if “to the person” were omitted.

(6) Paragraph 8(1) is to be read as if for “paragraph 1(3)” there were substituted “ paragraph 10 of Schedule 43D. ”

(7) Paragraph 10(b) is to be read as if for “the person concerned” there were substituted “ the responsible partner ”.

(8) Paragraph 9(1)(a) is to be read as if for “paragraph 2” there were substituted “ paragraph 10 of Schedule 43D ”.

(9) Paragraph 11(c) is to be read as if “to a person” were omitted.

Modifications to Schedule 43B U.K.

13 (1) Schedule 43B to FA 2013 (procedural requirements: generic referral of tax arrangements) has effect with the modifications in sub-paragraph (2). U.K.

(2) Paragraph 1 is to be read as if—

(a) in sub-paragraph (1)(a), for “paragraph 1(3) of Schedule 43A” there were substituted “ paragraph 10 of Schedule 43D ”,

(b) for the words before sub-paragraph (b)(i), there were substituted “ the relevant corrective action has been taken before ”, and

(c) after sub-paragraph (5), there were inserted—

“(6) For the purposes of sub-paragraph (1)(b) the “relevant corrective action” is taken if (and only if) in respect of the tax advantage arising out of the lead arrangements—

(a) the responsible partner has taken the action mentioned in paragraph 4A(1)(c) of Schedule 43, or

(b) each of the relevant partners in question have taken the action described in paragraph 4B(1)(c) of that Schedule.”

Notices may be given on assumption that tax advantage does arise U.K.

14 (1) A designated HMRC officer may give a notice, or do anything else, under this Part of this Schedule where the officer considers that a tax advantage might have arisen. U.K.

(2) Accordingly, any notice given by a designated HMRC officer under paragraph 10 may be expressed to be given on the assumption that the tax advantage does arise (without agreeing that it does).

HMRC officers U.K.

15 U.K. Anything that may or must be done by a given designated HMRC officer under this Part of this Schedule may be done instead by any other designated HMRC officer.]