Finance Act 2013

[F1 SCHEDULE 43A U.K. Procedural requirements: pooling notices and notices of binding

Textual Amendments

F1 Sch. 43A inserted (15.9.2016 with effect in accordance with s. 157(30) of the amending Act) by Finance Act 2016 (c. 24), s. 157(2)

Pooling notices U.K.

1 (1) This paragraph applies where a person has been given a notice under paragraph 3 of Schedule 43 in relation to any tax arrangements (the “lead arrangements”) and the condition in sub-paragraph (2) is met. U.K.

(2) The condition is that the period of 45 days mentioned in paragraph 4(1) of Schedule 43 has expired but no notice under paragraph 12 of Schedule 43 or paragraph 8 of Schedule 43B has yet been given in respect of the matter.

(3) If a designated HMRC officer considers—

(a) that a tax advantage has arisen to another person (“R”) from tax arrangements that are abusive,

(b) that those tax arrangements (“R's arrangements”) are equivalent to the lead arrangements, and

(c) that the advantage ought to be counteracted under section 209,

the officer may give R a notice (a “pooling notice”) which places R's arrangements in a pool with the lead arrangements.

(4) There is one pool for any lead arrangements, so all tax arrangements placed in a pool with the lead arrangements (as well as the lead arrangements themselves) are in one and the same pool.

(5) Tax arrangements which have been placed in a pool do not cease to be in the pool except where that is expressly provided for by this Schedule (regardless of whether or not the lead arrangements or any other tax arrangements remain in the pool).

(6) The officer may not give R a pooling notice if R has been given in respect of R's arrangements a notice under paragraph 3 of Schedule 43.

Notice of proposal to bind arrangements to counteracted arrangements U.K.

2 (1) This paragraph applies where a counteraction notice has been given to a person in relation to any tax arrangements (the “counteracted arrangements”) which are in a pool created under paragraph 1. U.K.

(2) If a designated HMRC officer considers—

(a) that a tax advantage has arisen to another person (“R”) from tax arrangements that are abusive,

(b) that those tax arrangements (“R's arrangements”) are equivalent to the counteracted arrangements, and

(c) that the advantage ought to be counteracted under section 209,

the officer may give R a notice (a “notice of binding”) in relation to R's arrangements.

(3) The officer may not give R a notice of binding if R has been given in respect of R's arrangements a notice under—

(a) paragraph 1, or

(b) paragraph 3 of Schedule 43.

(4) In this paragraph “counteraction notice” means a notice such as is mentioned in sub-paragraph (2) of paragraph 12 of Schedule 43 or sub-paragraph (3) of paragraph 8 of Schedule 43B (notice of final decision to counteract).

3 (1) The decision whether or not to give R a pooling notice or notice of binding must be taken, and any notice must be given, as soon as is reasonably practicable after HMRC becomes aware of the relevant facts. U.K.

(2) A pooling notice or notice of binding must—

(a) specify the tax arrangements in relation to which the notice is given and the tax advantage,

(b) explain why the officer considers R's arrangements to be equivalent to the lead arrangements or the counteracted arrangements (as the case may be),

(c) explain why the officer considers that a tax advantage has arisen to R from tax arrangements that are abusive,

(d) set out the counteraction that the officer considers ought to be taken, and

(e) explain the effect of—

(i) paragraphs 4 to 10,

(ii) subsection (9) of section 209, and

(iii) section 212A.

(3) A pooling notice or notice of binding may set out steps that R may (subject to subsection (9) of section 209) take to avoid the proposed counteraction.

Corrective action by a notified taxpayer U.K.

4 (1) If a person to whom a pooling notice or notice of binding has been given takes the relevant corrective action in relation to the tax arrangements and tax advantage specified in the notice before the beginning of the closed period mentioned in section 209(9), the person is to be treated for the purposes of paragraphs 8 and 9 and Schedule 43B (generic referral of tax arrangements) as not having been given the notice in question (and accordingly the tax arrangements in question are no longer in the pool). U.K.

(2) For the purposes of this Schedule the “relevant corrective action” is taken if (and only if) the person takes the steps set out in sub-paragraphs (3) and (4).

(3) The first step is that—

(a) the person amends a return or claim to counteract the tax advantage specified in the pooling notice or notice of binding, or

(b) if the person has made a tax appeal (by notifying HMRC or otherwise) on the basis that the tax advantage specified in the pooling notice or notice of binding arises from the tax arrangements specified in that notice, the person takes all necessary action to enter into an agreement with HMRC (in writing) for the purpose of relinquishing that advantage.

(4) The second step is that the person notifies HMRC—

(a) that the first step has been taken, and

(b) of any additional amount which has or will become due and payable in respect of tax by reason of the first step being taken.

(5) Where a person takes the first step described in sub-paragraph (3)(b), HMRC may proceed as if the person had not taken the relevant corrective action if the person fails to enter into the written agreement.

(6) In determining the additional amount which has or will become due and payable in respect of tax for the purposes of sub-paragraph (4)(b), it is to be assumed that, where the person takes the necessary action as mentioned in sub-paragraph (3)(b), the agreement is then entered into.

(7) No enactment limiting the time during which amendments may be made to returns or claims operates to prevent the person taking the first step mentioned in sub-paragraph (3)(a) before the tax enquiry is closed.

(8) No appeal may be brought, by virtue of a provision mentioned in sub-paragraph (9), 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 taxpayer to a return or claim in taking the first step mentioned in sub-paragraph (3)(a).

(9) The provisions are—

(a) paragraph 35(1)(b) of Schedule 33,

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

(c) paragraph 9 of Schedule 1A to TMA 1970,

(d) paragraph 34(3) of Schedule 18 to FA 1998, and

(e) paragraph 35(1)(b) of Schedule 10 to FA 2003.

Corrective action by lead taxpayer U.K.

5 U.K. If the person mentioned in paragraph 1(1) takes the relevant corrective action (as defined in paragraph 4A of Schedule 43) before the end of the period of 75 days beginning with the day on which the notice mentioned in paragraph 1(1) was given to that person, the lead arrangements are treated as ceasing to be in the pool.

Opinion notices and right to make representations U.K.

6 (1) Sub-paragraph (2) applies where— U.K.

(a) a pooling notice is given to a person in relation to any tax arrangements, and

(b) an opinion notice (or opinion notices) under paragraph 11(2) of Schedule 43 about another set of tax arrangements in the pool (“the referred arrangements”) is subsequently given to a designated HMRC officer.

(2) The officer must give the person a pooled arrangements opinion notice.

(3) No more than one pooled arrangements opinion notice may be given to a person in respect of the same tax arrangements.

(4) Where a designated HMRC officer gives a person a notice of binding, the officer must, at the same time, give the person a bound arrangements opinion notice.

7 (1) In relation to a person who is, or has been, given a pooling notice, “pooled arrangements opinion notice” means a written notice which— U.K.

(a) sets out a report prepared by HMRC of any opinion of the GAAR Advisory Panel about the referred arrangements,

(b) explains the person's right to make representations falling within sub-paragraph (3), and

(c) sets out the period in which those representations may be made.

(2) In relation to a person who is given a notice of binding “bound arrangements opinion notice” means a written notice which—

(a) sets out a report prepared by HMRC of any opinion of the GAAR Advisory Panel about the counteracted arrangements (see paragraph 2(1)),

(b) explains the person's right to make representations falling within sub-paragraph (3), and

(c) sets out the period in which those representations may be made.

(3) A person who is given a pooled arrangements opinion notice or a bound arrangements opinion notice has 30 days beginning with the day on which the notice is given to make representations in any of the following categories—

(a) representations that no tax advantage has arisen to the person from the arrangements to which the notice relates;

(b) representations as to why the arrangements to which the notice relates are or may be materially different from—

(i) the referred arrangements (in the case of a pooled arrangements opinion notice), or

(ii) the counteracted arrangements (in the case of a bound arrangements opinion notice).

(4) In sub-paragraph (3)(b) references to “arrangements” include any circumstances which would be relevant in accordance with section 207 to a determination of whether the tax arrangements in question are abusive.

Notice of final decision U.K.

8 (1) This paragraph applies where— U.K.

(a) any tax arrangements have been placed in a pool by a notice given to a person under paragraph 1, and

(b) a designated HMRC officer has given a notice under paragraph 12 of Schedule 43 in relation to any other arrangements in the pool (the “referred arrangements”).

(2) The officer must, having considered any opinion of the GAAR Advisory Panel about the referred arrangements and any representations made under paragraph 7(3) in relation to the arrangements mentioned in sub-paragraph (1)(a), give the person a written notice setting out whether the tax advantage arising from those arrangements is to be counteracted under the general anti-abuse rule.

9 (1) This paragraph applies where— U.K.

(a) a person has been given a notice of binding under paragraph 2, and

(b) the period of 30 days for making representations under paragraph 7(3) has expired.

(2) A designated HMRC officer must, having considered any opinion of the GAAR Advisory Panel about the counteracted arrangements and any representations made under paragraph 7(3) in relation to the arrangements specified in the notice of binding, give the person a written notice setting out whether the tax advantage arising from the arrangements specified in the notice of binding is to be counteracted under the general anti-abuse rule.

10 U.K. If a notice under paragraph 8(2) or 9(2) states that a tax advantage is to be counteracted, it must also set out—

(a) the adjustments required to give effect to the counteraction, and

(b) if relevant, any steps the person concerned is required to take to give effect to it.

“Equivalent arrangements” U.K.

11 (1) For the purposes of paragraph 1, tax arrangements are “equivalent” to one another if they are substantially the same as one another having regard to— U.K.

(a) their substantive results,

(b) the means of achieving those results, and

(c) the characteristics on the basis of which it could reasonably be argued, in each case, that the arrangements are abusive tax arrangements under which a tax advantage has arisen to a person.

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

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

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

Power to amend U.K.

13 (1) The Treasury may by regulations amend this Schedule (apart from this paragraph). U.K.

(2) Regulations under sub-paragraph (1) may include—

(a) any amendment of this Part that is appropriate in consequence of an amendment by virtue of sub-paragraph (1);

(b) transitional provision.

(3) Regulations under sub-paragraph (1) are to be made by statutory instrument.

(4) A statutory instrument containing regulations under sub-paragraph (1) is subject to annulment in pursuance of a resolution of the House of Commons.]