Finance Act 2013

Special charging rules for trading income U.K.

74 U.K. ITTOIA 2005 is amended as follows.

75 U.K. In section 6 (territorial scope of charge to tax), after subsection (2) insert—

“(2A) If the tax year is a split year as respects a UK resident individual, this section has effect as if, for the overseas part of that year, the individual were non-UK resident.”

76 (1) Section 17 (effect of becoming or ceasing to be UK resident) is amended as follows. U.K.

(2) For subsection (1) substitute—

“(1) This section applies if—

(a) an individual carries on a trade otherwise than in partnership, and

(b) there is a change of residence.

(1A) For the purposes of this section there is a “change of residence” if—

(a) the individual becomes or ceases to be UK resident, or

(b) a tax year is, as respects the individual, a split year.

(1B) The change of residence occurs—

(a) in a case falling within subsection (1A)(a), at the start of the tax year for which the individual becomes or ceases to be UK resident, and

(b) in a case falling within subsection (1A)(b), at the start of whichever of the UK part or the overseas part of the tax year is the later part.”

(3) In subsection (2), at the beginning insert “ If this section applies and the individual does not actually cease permanently to carry on the trade immediately before the change of residence occurs, ”.

77 U.K. In section 243 (post-cessation receipts: extent of charge to tax), after subsection (5) insert—

“(6) If the tax year is a split year as respects a UK resident individual, this section has effect as if, for the overseas part of that year, the individual were non-UK resident.”

78 U.K. In section 849 (calculation of firm's profits or losses), after subsection (3) insert—

“(3A) For any tax year that is a split year as respects the partner, this section has effect as if the partner were non-UK resident in the overseas part of the year.”

79 (1) Section 852 (carrying on by partner of notional trade) is amended as follows. U.K.

(2) For subsection (6) substitute—

“(6) If there is a change of residence, the partner is treated as permanently ceasing to carry on one notional trade when that change of residence occurs and starting to carry on another immediately afterwards.”

(3) After subsection (7) insert—

“(8) Subsections (1A) and (1B) of section 17 apply for the purposes of subsection (6).”

80 (1) Section 854 (carrying on by partner of notional business) is amended as follows. U.K.

(2) For subsection (5) substitute—

“(5) If there is a change of residence, the partner is treated as permanently ceasing to carry on one notional business when that change of residence occurs and starting to carry on another immediately afterwards.”

(3) After that subsection insert—

“(5A) Subsections (1A) and (1B) of section 17 apply for the purposes of subsection (5).”