In paragraph 10 (pension input amount for cash balance and defined benefits arrangements), for sub-paragraph (2) substitute—

“(2)

The appropriate fraction is—

$\frac{\mathrm{TE}+\mathrm{TSI}}{\mathrm{EI}}$

where—

EI is the total amount of employment income of the individual from any relevant employment or employments for the tax year, excluding any such income which is exempt income (within the meaning of section 8 of ITEPA 2003),

TE is so much of EI as constitutes taxable earnings from any such employment (within the meaning of section 10(2) of that Act), and

TSI is so much of EI as constitutes taxable specific income from any such employment (within the meaning of section 10(3) to (5) of that Act).”

In paragraph 11 (pension input amount for other money purchase arrangements), for sub-paragraph (2) substitute—

“(2)

The appropriate fraction is—

$\frac{\mathrm{TE}+\mathrm{TSI}}{\mathrm{EI}}$

where—

EI is the total amount of employment income of the individual from any employment or employments with the employer for the tax year, excluding any such income which is exempt income (within the meaning of section 8 of ITEPA 2003),

TE is so much of EI as constitutes taxable earnings from any such employment (within the meaning of section 10(2) of that Act), and

TSI is so much of EI as constitutes taxable specific income from any such employment (within the meaning of section 10(3) to (5) of that Act).”

In paragraph 35 (free shares: maximum annual award) after sub-paragraph (2) insert—

“(2A)

The Treasury may by order amend sub-paragraph (1) by substituting for any amount for the time being specified there an amount specified in the order.”

In paragraph 46 (partnership shares: maximum amount of deductions from employee's salary) after sub-paragraph (5) insert—

“(6)

The Treasury may by order amend sub-paragraph (1) by substituting for any amount for the time being specified there an amount specified in the order.”

In paragraph 60 (matching shares: maximum ratio of matching shares to partnership shares) after sub-paragraph (3) insert—

“(4)

The Treasury may by order amend sub-paragraph (2) by substituting for any ratio for the time being specified there a ratio specified in the order.”

For subsection (3) (which limits SEIS relief to shares issued on or after 6 April 2012 but before 6 April 2017) substitute—

“(3)

This Part has effect in relation to shares issued on or after 6 April 2012 only.”

After that section insert—

“198BExcluded activities: subsidised generation of heat and subsidised production of gas or fuel

(1)

This section supplements section 192(1)(kb).

(2)

The generation of heat, or production of gas or fuel, is “subsidised” if a payment is made, or another incentive is given, under—

(a)

a scheme established by regulations under section 100 of the Energy Act 2008 or section 113 of the Energy Act 2011 (renewable heat incentives), or

(b)

a similar scheme established in a territory outside the United Kingdom,

in respect of the heat generated, or gas or fuel produced.

(3)

But the generation of heat, or production of gas or fuel, is not to be taken to fall within section 192(1)(kb) if Condition A or B is met.

(4)

Condition A is that the generation or production is carried on by—

(a)

a community interest company,

(b)

a co-operative society,

(c)

a community benefit society,

(d)

a NI industrial and provident society, or

(e)

an SCE formed in accordance with Council Regulation (EC) No 1435/2003 on the Statute for a European Cooperative Society.

(5)

Condition B is that the plant used for the generation of the heat, or production of the gas or fuel, relies wholly or mainly on anaerobic digestion.

(6)

Section 198A(9) (definitions) applies for the purposes of this section as for the purposes of section 198A.”

After that section insert—

“309BExcluded activities: subsidised generation of heat and subsidised production of gas or fuel

(1)

This section supplements section 303(1)(kb).

(2)

The generation of heat, or production of gas or fuel, is “subsidised” if a payment is made, or another incentive is given, under—

(a)

a scheme established by regulations under section 100 of the Energy Act 2008 or section 113 of the Energy Act 2011 (renewable heat incentives), or

(b)

a similar scheme established in a territory outside the United Kingdom,

in respect of the heat generated or gas or fuel produced.

(3)

But the generation of heat, or production of gas or fuel, is not to be taken to fall within section 303(1)(kb) if Condition A or B is met.

(4)

Condition A is that the generation or production is carried on by—

(a)

a community interest company,

(b)

a co-operative society,

(c)

a community benefit society,

(d)

a NI industrial and provident society, or

(e)

an SCE formed in accordance with Council Regulation (EC) No 1435/2003 on the Statute for a European Cooperative Society.

(5)

Condition B is that the plant used for the generation of the heat, or production of the gas or fuel, relies wholly or mainly on anaerobic digestion.

(6)

Section 309A(9) (definitions) applies for the purposes of this section as for the purposes of section 309A.”

After section 225D insert—

“225EDisposals by disabled persons or persons in care homes etc

(1)

This section applies where a gain to which section 222 applies accrues to an individual and—

(a)

the conditions in subsection (2) are met, or

(b)

the conditions in subsection (3) are met.

(2)

The conditions mentioned in subsection (1)(a) are that at the time of the disposal—

(a)

the individual is a disabled person or a long-term resident in a care home, and

(b)

the individual does not have any other relevant right in relation to a private residence.

(3)

The conditions mentioned in subsection (1)(b) are that at the time of the disposal—

(a)

the individual's spouse or civil partner is a disabled person or a long-term resident in a care home, and

(b)

neither the individual nor the individual's spouse or civil partner has any other relevant right in relation to a private residence.

(4)

Where this section applies, the references in section 223(1) and (2)(a) to 18 months are treated as references to 36 months.

(5)

An individual is a “long-term resident” in a care home at the time of the disposal if at that time the individual —

(a)

is resident there, and

(b)

has been resident there, or can reasonably be expected to be resident there, for at least three months.

(6)

An individual has “any other relevant right in relation to a private residence” at the time of the disposal if—

(a)

at that time—

(i)

the individual owns or holds an interest in a dwelling-house or part of a dwelling-house other than that in relation to which the gain accrued, or

(ii)

the trustees of a settlement own or hold an interest in a dwelling-house or part of a dwelling-house other than that in relation to which the gain accrued, and the individual is entitled to occupy that dwelling-house or part under the terms of the settlement, and

(b)

section 222 would have applied to any gain accruing to the individual or trustees on the disposal at that time of, or of that interest in, that dwelling house or part (or would have applied if a notice under subsection (5) of that section had been given).

(7)

In the application of this section in relation to a gain to which section 222 applies by virtue of section 225 (private residence occupied under terms of settlement)—

(a)

the reference in subsection (1) of this section to an individual is to the trustees of the settlement;

(b)

the references in subsections (2) to (6) of this section to the individual are to the person entitled under the terms of the settlement, as mentioned in section 225.

(8)

In this section—

“care home” means an establishment that provides accommodation together with nursing or personal care;

“disabled person” has the meaning given by Schedule 1A to FA 2005.”

After subsection (1) insert—

“(1A)

But it does not apply to foreign chargeable gains accruing to an individual in the overseas part of a split year as respects that individual, regardless of the part of the year (the overseas part or the UK part) in which the foreign chargeable gains are remitted.”

After the heading “CLASS 7A” insert—

“Assets within heads A and B below.

Head A”

Before the heading “CLASS 8” insert—

“Head B

Payment entitlements under the basic payment scheme (that is, the scheme of income support for farmers in pursuance of Regulation (EU) No 1307/2013 of the European Parliament and of the Council).”

In Chapter 14 of Part 8 of CTA 2009 (intangible fixed assets: miscellaneous provisions), after section 870 insert—

“Roll-over relief under TCGA 1992

870AClaims for relief made under sections 152 and 153 of TCGA 1992

(1)

Subsection (2) applies where—

(a)

a company has made a claim for relief under section 152 or 153 of TCGA 1992 (roll-over relief) during the period beginning with 1 April 2009 and ending with 19 March 2014, and

(b)

the relief claimed relates to disposal proceeds that are applied in acquiring an intangible fixed asset within the meaning of this Part.

(2)

The company is treated for the purposes of this Part as if the cost of the asset recognised for tax purposes were reduced on 19 March 2014 by the amount in respect of which the relief under section 152 or 153 of TCGA 1992 is given.

(3)

But the effect of subsection (2) must not be to reduce the tax written-down value of the asset to below nil.

(4)

The references to adjustments in sections 742(3) and 743(3) (assets written down) include any adjustment required by subsection (2).”

In section 45D (expenditure on cars with low carbon dioxide emissions), after subsection (1) insert—

“(1A)

The Treasury may by order amend subsection (1)(a) so as to extend the period specified.”

In section 45DA (expenditure on zero-emission goods vehicles), after subsection (1) insert—

“(1A)

The Treasury may by order amend subsection (1)(a) so as to extend the period specified.”

In section 45E (expenditure on plant or machinery for gas refuelling station), after subsection (1) insert—

“(1A)

The Treasury may by order amend subsection (1)(a) so as to extend the period specified.”

For subsection (1) substitute—

“(1)

In this Part “qualifying expenditure” means capital expenditure incurred before the expiry date—

(a)

in respect of which Conditions A and B are met, and

(b)

which is not excluded by subsection (3), (3B) or (3D).”

After subsection (2) insert—

“(2A)

Condition A is that the expenditure is incurred on—

(a)

the conversion of a qualifying building into qualifying business premises,

(b)

the renovation of a qualifying building if it is or will be qualifying business premises, or

(c)

repairs to a qualifying building or, where the building is part of a building, to the building of which the qualifying building forms part, to the extent that the repairs are incidental to expenditure within paragraph (a) or (b).

(2B)

Condition B is that the expenditure is incurred on—

(a)

building works,

(b)

architectural or design services,

(c)

surveying or engineering services,

(d)

planning applications, or

(e)

statutory fees or statutory permissions.

(2C)

But Condition B is treated as met in respect of expenditure incurred on matters not mentioned in that Condition to the extent that that expenditure (in total) does not exceed 5% of the qualifying expenditure incurred on the matters mentioned in subsection (2B)(a) to (c).”

After that subsection insert—

“(3A)

The fixtures which fall within this subsection are—

(a)

integral features within the meaning of section 33A (taking account of section 33A(6) and any provision for the time being made under section 33A(7)) or part of such a feature;

(b)

automatic control systems for opening and closing doors, windows and vents;

(c)

window cleaning installations;

(d)

fitted cupboards and blinds;

(e)

protective installations such as lightning protection, sprinkler and other equipment for containing or fighting fires, fire alarm systems and fire escapes;

(f)

building management systems;

(g)

cabling in connection with telephone, audio-visual data installations and computer networking facilities, which are incidental to the occupation of the building;

(h)

sanitary appliances, and bathroom fittings which are hand driers, counters, partitions, mirrors or shower facilities;

(i)

kitchen and catering facilities for producing and storing food and drink for the occupants of the building;

(j)

signs;

(k)

public address systems;

(l)

intruder alarm systems.

(3B)

Expenditure is excluded if, and to the extent that, it exceeds the market value amount for the works, services or other matters to which it relates.

(3C)

“The market value amount” means the amount of expenditure which it would have been normal and reasonable to incur on the works, services or other matters—

(a)

in the market conditions prevailing when the expenditure was incurred, and

(b)

assuming the transaction as a result of which the expenditure was incurred was between persons dealing with each other at arm's length in the open market.

(3D)

Expenditure is excluded if the qualifying building was used at any time during the period of 12 months ending with the day on which the expenditure is incurred.”

In subsection (5), after “regulations” insert“—

(a)

amend this section so as to add a description of fixture to the list in subsection (3A), or vary or remove a description of fixture in that list;

(b)”

After that section insert—

“360BAExpenditure not treated as qualifying expenditure if delay in carrying out works etc

(1)

This section applies where—

(a)

(ignoring this section) qualifying expenditure is incurred on works, services or other matters in a chargeable period, and

(b)

those works, services or other matters are not completed or provided before the end of the period of 36 months beginning with the date the expenditure was incurred.

(2)

To the extent that it relates to so much of those works, services or other matters as are not completed or provided before the end of that period, the expenditure is to be treated for the purposes of this Part as never having been incurred (unless and until subsection (6) applies).

(3)

All such assessments and adjustments of assessments are to be made as are necessary to give effect to subsection (2).

(4)

If a person who has made a tax return becomes aware that, after making it, anything in it has become incorrect because of the operation of this section, the person must give notice to an officer of Revenue and Customs specifying how the return needs to be amended.

(5)

The notice must be given within 3 months beginning with the day on which the person first became aware that anything in the return had become incorrect because of the operation of this section.

(6)

If, at any time after the end of the period mentioned in subsection (1)(b), those works, services or other matters are completed or provided, the expenditure to which subsection (2) applies is to be treated for the purposes of this Part as incurred at that time.”

For section 360L of that Act (grants affecting entitlement to allowances) substitute—

“360LGrants affecting entitlement to allowances

(1)

No initial allowance or writing-down allowance under this Part is to be made in respect of qualifying expenditure in respect of a qualifying building if a relevant grant or relevant payment is made towards—

(a)

that expenditure, or

(b)

any other expenditure which is incurred by any person in respect of the same building, and on the same single investment project as that expenditure.

(2)

An initial allowance or writing-down allowance made in respect of qualifying expenditure is to be withdrawn if—

(a)

after it is made, a relevant grant or relevant payment is made towards that expenditure, or

(b)

within the period of 3 years beginning when that expenditure was incurred, a relevant grant or relevant payment is made towards any other expenditure which is incurred by any person in respect of the same building, and on the same single investment project, as that expenditure.

(3)

All such assessments and adjustments of assessments are to be made as are necessary to give effect to subsection (2).

(4)

If a person who has made a return becomes aware that, after making it, anything in it has become incorrect because of the operation of this section, that person must give notice to an officer of Revenue and Customs specifying how the return needs to be amended.

(5)

The notice must be given within 3 months beginning with the day on which the person first became aware that anything in the return had become incorrect because of the operation of this section.

(6)

In this section—

“General Block Exemption Regulation” means Commission Regulation (EU) No 651/2014 (General block exemption Regulation);

“relevant grant or relevant payment” means a grant or payment which is—

(a)

a State aid, other than an allowance under this Part, or

(b)

a grant or subsidy, other than a State aid, which the Treasury by order declares to be relevant for the purposes of the withholding of allowances under this Part;

“single investment project” has the same meaning as in the General Block Exemption Regulation.

(7)

Nothing in this section limits references to “State aid” to State aid which is required to be notified to and approved by the European Commission.

(8)

The Treasury may by order amend this section to make provision consequential upon the General Block Exemption Regulation being replaced by another instrument.”

In section 399 (expenditure excluded from being qualifying expenditure), after subsection (1) insert—

“(1A)

Expenditure incurred by a person for the purposes of a mineral extraction trade is not qualifying expenditure if—

(a)

when the expenditure is incurred, the person is carrying on the trade but the trade is not at that time a mineral extraction trade, or

(b)

the person has not begun to carry on the trade when the expenditure is incurred and, when the person begins to carry on the trade, the trade is not a mineral extraction trade.

(1B)

Section 577(2) (references to commencement etc of a trade) does not apply to subsection (1A).”

For section 161(4)(a) (pre-trading expenditure on plant or machinery for mineral exploration and access), substitute—

“(a)

pre-trading expenditure” means capital expenditure incurred before the day on which a person begins to carry on a trade that is a mineral extraction trade, but only if there is no prior time when the person carried on that trade and the trade was not a mineral extraction trade,”.

After section 161(4) insert—

“(4A)

Section 577(2) (references to commencement etc of a trade) does not apply to subsection (4)(a).”

After section 431 (discontinuance of trade) insert—

“431AForeign permanent establishment exemption

(1)

Subsection (2) applies if—

(a)

an election under section 18A of CTA 2009 has effect in relation to a company, and

(b)

the company carries on any trade which consists of, or includes, the working of a source of mineral deposits.

(2)

That trade so far as carried on through one or more permanent establishments outside the United Kingdom is treated for the purposes of this Part as a trade—

(a)

separate from any other trade of the company, and

(b)

all the profits and gains from which are not, or (if there were any) would not be, chargeable to tax.

431BDisposal value: no allowance/no charge cases

(1)

If—

(a)

an election under section 18A of CTA 2009 has effect in relation to a company, and

(b)

the operation of sections 431A and 421(1)(b)(ii) and (2) requires the company to bring the disposal value of an asset into account,

the disposal value is such an amount as gives rise to neither a balancing allowance nor a balancing charge.

(2)

Subsection (1) does not apply if—

(a)

the company's qualifying expenditure in respect of the asset exceeds £5 million,

(b)

the company has claimed any capital allowance in respect of any of that expenditure, and

(c)

the company has, at any time in a relevant accounting period, used the asset otherwise than for the purposes of a permanent establishment outside the United Kingdom.

(3)

In subsection (2)(c) “relevant accounting period” means an accounting period ending before, but ending not more than 6 years before, “the relevant day” as defined by section 18F of CTA 2009.

431CNotional allowances

(1)

Subsection (2) applies if—

(a)

an election under section 18A of CTA 2009 has effect in relation to a company, and

(b)

but for section 18A of CTA 2009 and section 431A(2)(b), an allowance under this Part (“the notional allowance”) could be claimed under section 3(1) in respect of assets provided for the purposes of a permanent establishment outside the United Kingdom through which business is or has been carried on by the company.

(2)

The notional allowance (and any charge in connection with it which would have arisen if the allowance had been claimed) is to be made automatically and reflected in any calculation, for any relevant accounting period of the company, of the profits or losses attributable to business carried on by the company through such a permanent establishment.

(3)

Subsection (4) applies if, at the time an election under section 18A of CTA 2009 takes effect in relation to a company, the company is, by reason of sections 431A and 421(1)(b)(ii) and (2), required to bring into account the disposal value of any asset provided for the purposes of a foreign permanent establishment through which business is or has been carried on by the company.

(4)

For the purposes of subsections (1) and (2), the company is treated as having incurred at that time, for the purposes of the trade mentioned in section 431A(2), qualifying expenditure of an amount equal to that disposal value.

(5)

In subsection (2) “relevant accounting period”, in relation to a company by which an election under section 18A of CTA 2009 is made, means an accounting period of the company to which the election applies (as to which see section 18F of that Act).”

In Chapter 2 of Part 6 of TCGA 1992 (oil and mineral industries), after section 198I insert—

“198JOil and gas: reinvestment after pre-trading disposal

(1)

This section applies if a company which is an E&A company makes a disposal of, or of the company's interest in, relevant E&A assets and that disposal is—

(a)

a disposal of, or of an interest in, a UK licence which relates to an undeveloped area, or

(b)

a disposal of an asset used in an area covered by a licence under Part 1 of the Petroleum Act 1998 or the Petroleum (Production) Act (Northern Ireland) 1964 which authorises the company to undertake E&A activities.

(2)

If—

(a)

the consideration which the company obtains for the disposal is applied by the company, within the permitted reinvestment period—

(i)

on E&A expenditure at a time when the company is an E&A company, or

(ii)

on oil assets taken into use, and used only, for the purposes of a ring fence trade carried on by it, and

(b)

the company makes a claim under this subsection in relation to the disposal,

any gain accruing to the company on the disposal is not a chargeable gain.

(3)

If part only of the amount or value of the consideration for the disposal is applied as described in subsection (2)(a)—

(a)

subsection (2) does not apply, but

(b)

subsection (4) applies if all of the amount or value of the consideration is so applied except for a part which is less than the amount of the gain (whether all chargeable gain or not) accruing on the disposal.

(4)

If the company makes a claim under this subsection in relation to the disposal, the company is to be treated for the purposes of this Act as if the amount of the gain accruing on the disposal were reduced to the amount of the part mentioned in subsection (3)(b) (and, if not all chargeable gain, with a proportionate reduction in the amount of the chargeable gain).

(5)

The incurring of expenditure is within “the permitted reinvestment period” if the expenditure is incurred in the period beginning 12 months before and ending 3 years after the disposal, or at such earlier or later time as the Commissioners for Her Majesty's Revenue and Customs may by notice allow.

(6)

Subsections (6), (7), (10) and (11) of section 152 apply for the purposes of this section as they apply for the purposes of section 152, except that—

(a)

in subsection (6) the reference to a trade is to be read as a reference to E&A activities or a ring fence trade,

(b)

in subsection (7), the reference to the old assets is to be read as a reference to the assets disposed of as mentioned in subsection (1) of this section, and

(c)

in subsection (7), the references to the trade are to be read as references to the E&A activities.

(7)

In this section—

“E&A activities” means oil and gas exploration and appraisal in the United Kingdom or an area designated by Order in Council under section 1(7) of the Continental Shelf Act 1964;

“E&A company” means a company which carries on E&A activities and does not carry on a ring fence trade;

“E&A expenditure” means expenditure on E&A activities which is treated as such under generally accepted accounting practice;

“oil asset” has the same meaning as in section 198E, and section 198I applies for the purposes of this section as it applies for the purposes of section 198E;

“relevant E&A assets” means assets which—

(a)

are used, and used only, for the purposes of E&A activities carried on by the company throughout the period of ownership, and

(b)

are within the classes of assets listed in section 155 (with references to “the trade” in that section being read as references to the E&A activities);

“ring fence trade” has the meaning given by section 277 of CTA 2010;

“UK licence” means a licence within the meaning of Part 1 of the Oil Taxation Act 1975;

and a reference to a UK licence which relates to an undeveloped area has the same meaning as in section 194 (see section 196).

198KProvisional application of section 198J

(1)

This section applies where a company for a consideration disposes of, or of an interest in, any assets at a time when it is an E&A company and declares, in the company's return for the chargeable period in which the disposal takes place—

(a)

that the whole or any specified part of the consideration will be applied, within the permitted reinvestment period—

(i)

on E&A expenditure at a time when the company is an E&A company, or

(ii)

on expenditure on oil assets which are taken into use, and used only, for the purposes of the company's ring fence trade, and

(b)

that the company intends to make a claim under section 198J(2) or (4) in relation to the disposal.

(2)

Until the declaration ceases to have effect, section 198J applies as if the expenditure had been incurred and the person had made such a claim.

(3)

The declaration ceases to have effect as follows—

(a)

if and to the extent that it is withdrawn before the relevant day, or is superseded before that day by a valid claim under section 198J, on the day on which it is so withdrawn or superseded, and

(b)

if and to the extent that it is not so withdrawn or superseded, on the relevant day.

(4)

On the declaration ceasing to have effect in whole or in part, all necessary adjustments—

(a)

are to be made by making or amending assessments or by repayment or discharge of tax, and

(b)

are to be so made despite any limitation on the time within which assessments or amendments may be made.

(5)

In this section “the relevant day” means the fourth anniversary of the last day of the accounting period in which the disposal took place.

(6)

For the purposes of this section—

(a)

sections (6), (10) and (11) of section 152 apply as they apply for the purposes of that section, except that in subsection (6) the reference to a trade is to be read as a reference to E&A activities or a ring fence trade, and

(b)

terms used in this section which are defined in section 198J have the meaning given by that section.

198LExpenditure by member of same group

(1)

Section 198J applies where—

(a)

the disposal is by a company which, at the time of the disposal, is a member of a group of companies (within the meaning of section 170),

(b)

the E&A expenditure or expenditure on oil assets is by another company which, at the time the expenditure is incurred, is a member of the same group, and

(c)

the claim under section 198J is made by both companies,

as if both companies were the same person.

(2)

“E&A company”, “E&A expenditure” and “oil assets” have the meaning given by section 198J.”

In Schedule 7AC to TCGA 1992 (exemption for disposals by companies with substantial shareholding), in paragraph 15A (effect of transfer of trading assets within a group), after sub-paragraph (2) insert—

“(2A)

For the purposes of sub-paragraph (2)(b) and (d), “trade” includes oil and gas exploration and appraisal.”

After that section insert—

“174AClaims under section 174 where disadvantaged person within charge to income tax

A claim under section 174 may not be made if—

(a)

the disadvantaged person is a person (other than a company) within the charge to income tax in respect of profits arising from the relevant activities, and

(b)

the advantaged person is a company.”

After section 187 insert—

“Treatment of interest where claim prevented by section 174A

187AExcess interest treated as a qualifying distribution

(1)

Subsection (2) applies if Conditions A to C in section 187 are met in circumstances where section 174A prevents a claim under section 174.

(2)

The interest paid under the actual provision, so far as it exceeds ALINT, is treated for the purposes of the Income Tax Acts as a dividend paid by the company which paid the interest (and, accordingly, as a qualifying distribution).”