1(1)A loan or quasi-loan in relation to which sub-paragraph (2) applies is to be treated [F1for the purposes of sections 23A to 23H of ITTOIA 2005 as a relevant benefit that arises immediately before the end of 5 April 2019.] U.K.
(2)This sub-paragraph applies in relation to a loan or a quasi-loan if—
(a)the loan or quasi-loan was made—
(i)on or after [F29 December 2010], and
(ii)before 6 April 2017, and
(b)an amount of the loan or quasi-loan is outstanding immediately before the end of 5 April 2019.
(3)Where section 23E of ITTOIA 2005 applies [F3and T has not made an election for the purposes of sub-paragraph (3A)] in relation to a relevant benefit which is a loan or quasi-loan in relation to which sub-paragraph (2) applies, section 23E has effect—
(a)as if the “relevant benefit amount” were the amount of the loan or quasi-loan that is outstanding [F4at the time the relevant benefit is treated as arising, and]
[F5(b)where T ceases to carry on the relevant trade before the tax year in which the relevant benefit is treated as arising, as if section 23E(1)(b) were omitted and as if section 23E(1) provided that the relevant benefit amount is treated for income tax purposes as a post-cessation receipt of the trade received in that tax year.]
[F6(3A)Where section 23E of ITTOIA 2005 applies in relation to a relevant benefit which is a loan or quasi-loan in relation to which sub-paragraph (2) applies and T has made an election for the purposes of this sub-paragraph, section 23E has effect—
(a)as if the “relevant benefit amount” were one third of the amount of the loan or quasi-loan that is outstanding at the time the relevant benefit is treated as arising,
(b)as if section 23E(1)(a) specified the tax year in which the relevant benefit is treated as arising and each of the two subsequent tax years, and
(c)where T ceases to carry on the relevant trade before any tax year so specified in section 23E(1)(a), as if section 23E(1)(b) were omitted and as if section 23E(1) provided that the relevant benefit amount is to be treated for income tax purposes as a post-cessation receipt of the trade received in that tax year.
(3B)An election for the purposes of sub-paragraph (3A)—
(a)may be made at any time before 1 October 2020, and
(b)may be made at a later time if an officer of Revenue and Customs allows it.
(3C)But a person who is under a duty imposed by paragraph 22 of this Schedule or paragraph 35C of Schedule 11 may not make an election for the purposes of sub-paragraph (3A) until that duty has been complied with.
(3D)An election for the purposes of sub-paragraph (3A) may not be revoked.
(3E)A person who has made an election for the purposes of paragraph 1A of Schedule 11 is to be treated as having made an election for the purposes of sub-paragraph (3A) of this paragraph.
(3F)The Commissioners for Her Majesty’s Revenue and Customs may by regulations provide that sub-paragraph (3B)(a) applies to a specified class of persons as if the reference to 1 October 2020 were to such later date as is specified.
(3G)In sub-paragraph (3F) “specified” means specified in the regulations.]
(4)This paragraph is subject to paragraphs 19 and 20 (accelerated payments).
(5)For the purposes of this paragraph, whether an amount of a loan or quasi-loan is outstanding at a particular time—
(a)is to be determined in accordance with the following provisions of this Schedule, and
(b)does not depend on the loan or quasi-loan subsisting at that time.
Textual Amendments
F1Words in Sch. 12 para. 1(1) substituted (22.7.2020) by Finance Act 2020 (c. 14), s. 16(5)(a)
F2Words in Sch. 12 para. 1(2)(a) substituted (22.7.2020) by Finance Act 2020 (c. 14), s. 15(2)
F3Words in Sch. 12 para. 1(3) inserted (22.7.2020) by Finance Act 2020 (c. 14), s. 16(5)(b)(i)
F4Words in Sch. 12 para. 1(3)(a) substituted (22.7.2020) by Finance Act 2020 (c. 14), s. 16(5)(b)(ii)
F5Sch. 12 para. 1(3)(b) substituted for Sch. 12 para. 1(3)(b)(c) (22.7.2020) by Finance Act 2020 (c. 14), s. 16(5)(b)(iii)
F6Sch. 12 para. 1(3A)-(3G) inserted (22.7.2020) by Finance Act 2020 (c. 14), s. 16(5)(c)