23ITEPA 2003 is amended as follows.
24(1)Section 554A (application of Chapter 2 of Part 7A: the main case) is amended as follows.
(2)In subsection (2) after “paragraph 1” insert “or 1A”.
(3)For subsection (4) substitute—
“(4)Chapter 2 does not apply by reason of—
(a)a relevant step taken on or after A’s death if—
(i)the relevant step is within section 554B, or
(ii)the relevant step is within section 554C by virtue of subsection (1)(ab) of that section,
(b)a relevant step within paragraph 1 of Schedule 11 to F(No.2)A 2017 which is treated as being taken on or after A’s death, or
(c)a relevant step within paragraph 1A of Schedule 11 to F(No.2)A 2017 in a case where the initial step (within the meaning given by sub-paragraph (1)(a) of that paragraph) is treated as being taken on or after A’s death.”
25In section 554Z (interpretation: general) in subsection (10)(d) after “paragraph 1” insert “or 1A”.
26Schedule 11 to F(No.2)A 2017 (employment income provided through third parties: loans etc outstanding on 5 April 2019) is amended as follows.
27In paragraph 2 (meaning of “loan”, “quasi-loan” and “approved repayment date”)—
(a)in sub-paragraph (2), in the words before paragraph (a), for “paragraph 1” substitute “paragraphs 1 and 1A”,
(b)in sub-paragraph (4) for “paragraph 1” substitute “paragraphs 1 and 1A”, and
(c)in sub-paragraph (5) for “paragraph 1” substitute “paragraphs 1 and 1A”.
28In paragraph 3(1) (meaning of “outstanding”: loans) for “paragraph 1” substitute “paragraphs 1 and 1A”.
29In paragraph 4 (when an amount of a loan is outstanding: certain repayments to be disregarded) in sub-paragraph (6) for “the relevant step treated as taken by paragraph 1” substitute “a relevant step treated as taken by paragraph 1 or 1A”.
30In paragraph 5 (meaning of “outstanding”: loans where A or B acquires a right to payment of the loan) in sub-paragraph (2)(b) for “paragraph 1(4)” substitute “paragraphs 1(4) and 1A(5)”.
31In paragraph 7 (meaning of “outstanding”: loans in currencies other than stirling) in sub-paragraph (3) after “relevant step” insert “within paragraph 1”.
32In paragraph 10 (meaning of “outstanding”: loans made in a depreciating currency) in sub-paragraph (1)(b) after “relevant step” insert “within paragraph 1”.
33In paragraph 11(1) (meaning of “outstanding”: quasi-loans) for “paragraph 1” substitute “paragraphs 1 and 1A”.
34In paragraph 12 (certain payments or transfers to be disregarded for the purposes of paragraph 11) in sub-paragraph (5) for “the relevant step treated as taken by paragraph 1” substitute “a relevant step treated as taken by paragraph 1 or 1A”.
35In paragraph 13 (meaning of “outstanding”: quasi-loans where A or B acquires a right to the payment or transfer of assets) in sub-paragraph (2)(b) for “paragraph 1(4)” substitute “paragraphs 1(4) and 1A(5)”.
36In paragraph 15 (meaning of “outstanding”: quasi-loans in currencies other than sterling) in sub-paragraph (3) after “relevant step” insert “within paragraph 1”.
37In paragraph 18 (meaning of “outstanding”: quasi-loans made in a depreciating currency) in sub-paragraph (1)(b) after “relevant step” insert “within paragraph 1”.
38After paragraph 35 insert—
35ZAChapter 2 of Part 7A of ITEPA 2003 does not apply by reason of a relevant step within paragraph 1A if that Chapter does not apply by reason of the initial step (within the meaning given by sub-paragraph (1)(a) of paragraph 1A).”
39(1)The Social Security (Contributions) Regulations 2001 (S.I. 2001/1004) are amended as follows.
(2)In regulation 22B (amounts to be treated as earnings: Part 7A of ITEPA 2003) in paragraph (3A)(a) after “paragraph 1” insert “or 1A”.
(3)In regulation 22C (amounts to be treated as earnings paid to or for the benefit of the earner: Schedule 11 to F(No.2)A 2017) in paragraph (1)—
(a)after “paragraph 1” insert “or 1A”, and
(b)after “paragraph 1(2)” insert “or 1A(3) or (4)”.