Office of Public Sector Information
SCHEDULE 7 continued PART 1 continued
(2) If the property, service or consideration is the income or chargeable gains, the amount remitted is equal to the amount of the income or chargeable gains.
(3) If the property, service or consideration derives from the income or chargeable gains, the amount remitted is equal to the amount of income or chargeable gains from which the property, service or consideration derives.
(4) If the income or chargeable gains are used as mentioned in section 809L(3)(c), the amount remitted is equal to the amount of income or chargeable gains used; but this is subject to subsection (10).
(5) If anything deriving from the income or chargeable gains is used as mentioned in section 809L(3)(c), the amount remitted is equal to the amount of income or chargeable gains from which what is used derives; but this is subject to subsection (10).
(6) In a case falling within section 809L(4)(a) or (b), the amount remitted is equal to the amount of the relevant income or chargeable gains.
(7) In a case falling within section 809L(4)(c), the amount remitted is equal to the amount of the relevant income or chargeable gains; but this is subject to subsection (10).
(8) In a case falling within section 809L(5)(a) or (b), the amount remitted is equal to the amount of the income or chargeable gains referred to in section 809O(4)(c).
(9) In a case falling within section 809L(5)(c), the amount remitted is equal to the amount of the income or chargeable gains referred to in section 809O(4)(c); but this is subject to subsection (10).
(10) If the debt is only partly in respect of the property or service, the amount remitted is (if it would otherwise be greater) limited to the amount the debt would be if it were wholly in respect of the property or service.
(11) In subsections (6) and (7) “relevant income or chargeable gains” means—
(a) if the qualifying property falls within section 809N(7)(a), the income or gains—
(i) of which the qualifying property consists, or
(ii) from which the qualifying property derives;
(b) if the qualifying property falls within section 809N(7)(b), the income or gains—
(i) of which the property given to the gift recipient consisted, or
(ii) from which that property derived;
(c) if the qualifying property falls within section 809N(7)(c), the income or gains—
(i) of which the property given to the gift recipient consists, or
(ii) from which that property derives.
(12) If the amount remitted (taken together with any amount previously remitted) would otherwise exceed the amount of the income or chargeable gains, the amount remitted is limited to the amount which (when taken together with any amount previously remitted) is equal to the amount of the income or chargeable gains.
(1) This section applies for the purposes mentioned in subsection (2) where condition A in section 809L is met and—
(a) the property or consideration for the service is (wholly or in part), or derives (wholly or in part, and directly or indirectly) from, a transfer from a mixed fund, or
(b) a transfer from a mixed fund, or anything deriving (wholly or in part, and directly or indirectly) from such a transfer, is used as mentioned in section 809L(3)(c).
(2) The purposes referred to in subsection (1) are—
(a) determining whether condition B in section 809L is met, and
(b) if it is met, determining (under section 809P) the amount of income or chargeable gains remitted.
(3) The extent to which the transfer is of the individual’s income or chargeable gains is to be determined as follows.
Step 1
For each of the categories of income and capital in paragraphs (a) to (i) of subsection (4), find (applying section 809R) the amount of income or capital of the individual for the relevant tax year in the mixed fund immediately before the transfer.
“The relevant tax year” is the tax year in which the transfer occurs.
Step 2
Find the earliest paragraph for which the amount determined under step 1 is not nil.
If that amount does not exceed the amount of the transfer, treat the transfer as containing the income or capital within that paragraph (and for that tax year).
Otherwise, treat the transfer as containing the relevant proportion of each kind of income or capital within that paragraph (and for that tax year).
“The relevant proportion” is the amount of the transfer divided by the amount determined under step 1 for that paragraph.
Step 3
Treat the amount of the transfer as reduced by the amount taken into account under step 2.
Step 4
If the amount of the transfer (as reduced under step 3) is not nil, start again at step 2.
In step 2, read the reference to the earliest paragraph of the kind mentioned there as a reference to the earliest such paragraph which has not previously been taken into account under that step in relation to the transfer.
Step 5
If the amount of the transfer (as reduced under step 3) is not nil once steps 2 and 3 have been undertaken in relation to all paragraphs of subsection (4) for which the amount determined under step 1 is not nil, start again at step 1.
In step 1, read the reference to the relevant tax year as a reference to the tax year immediately before the last tax year for which step 1 has been undertaken in relation to the transfer.
(4) The kinds of income and capital are—
(a) employment income (other than income within paragraph (b), (c) or (f)),
(b) relevant foreign earnings (other than income within paragraph (f)),
(c) foreign specific employment income (other than income within paragraph (f)),
(d) relevant foreign income (other than income within paragraph (g)),
(e) foreign chargeable gains (other than chargeable gains within paragraph (h)),
(f) employment income subject to a foreign tax,
(g) relevant foreign income subject to a foreign tax,
(h) foreign chargeable gains subject to a foreign tax, and
(i) income or capital not within another paragraph of this subsection.
(5) In subsection (4) “foreign tax” means any tax chargeable under the law of a territory outside the United Kingdom.
(6) In this section “mixed fund” means money or other property which, immediately before the transfer, contains or derives from—
(a) more than one of the kinds of income and capital mentioned in subsection (4), or
(b) income or capital for more than one tax year.
(7) References in this section to the amount of the transfer include the market value of it.
(8) References in this section and section 809R to anything deriving from income or capital within paragraph (i) of subsection (4) do not include—
(a) income or gains within any of paragraphs (a) to (h) of that subsection, or
(b) anything deriving from such income or gains.
(1) This section applies for the purposes of step 1 of section 809Q(3) (composition of mixed fund).
(2) Treat property which derives wholly or in part (and directly or indirectly) from an individual’s income or capital for a tax year as consisting of or containing that income or capital.
(3) If a debt relating (wholly or in part, and directly or indirectly) to property is at any time satisfied (wholly or in part) by—
(a) an individual’s income or capital for a tax year, or
(b) anything deriving (directly or indirectly) from such income or capital,
from that time treat the property as consisting of or containing the income or capital if and to the extent that it is just and reasonable to do so.
(4) Treat an offshore transfer from a mixed fund as containing the appropriate proportion of each kind of income or capital in the fund immediately before the transfer.
“The appropriate proportion” means the amount (or market value) of the transfer divided by the market value of the mixed fund immediately before the transfer.
(5) A transfer from a mixed fund is an “offshore transfer” for the purposes of subsection (4) if and to the extent that section 809Q does not apply in relation to it.
(6) Treat a transfer from a mixed fund as an “offshore transfer” (and section 809Q as not applying in relation to it, if it otherwise would do) if and to the extent that, at the end of a tax year in which it is made—
(a) section 809Q does not apply in relation to it, and
(b) on the basis of the best estimate that can reasonably be made at that time, section 809Q will not apply in relation to it.
(7) In this section ‘mixed fund’ means money or other property containing or deriving from—
(a) more than one of the kinds of income and capital mentioned in section 809Q(4), or
(b) income or capital for more than one tax year.
(8) If section 809Q applies in relation to part of a transfer, apply that section in relation to that part before applying subsection (4) in relation to the rest of the transfer.
(9) If section 809Q applies in relation to more than one transfer from a mixed fund, when undertaking step 1 in relation to the second or any subsequent transfer take into account the effect of step 2 of section 809Q(3) (composition of transfer) as it applied in relation to each earlier transfer.
(1) This section applies if, by reason of an arrangement the main purpose (or one of the main purposes) of which is to secure an income tax advantage or capital gains tax advantage, a mixed fund would otherwise be regarded as containing income or capital within any of paragraphs (f) to (i) of section 809Q(4).
(2) Treat the mixed fund as containing so much (if any) of the income or capital as is just and reasonable.
(3) “Arrangement” includes any scheme, understanding, transaction or series or transactions (whether or not enforceable).
(4) “Income tax advantage” has the meaning given by section 683.
(5) “Capital gains tax advantage” means—
(a) a relief from capital gains tax or increased relief from capital gains tax,
(b) a repayment of capital gains tax or increased repayment of capital gains tax,
(c) the avoidance or reduction of a charge to capital gains tax or an assessment to capital gains tax, or
(d) the avoidance of a possible assessment to capital gains tax.
(1) This section applies if—
(a) foreign chargeable gains accrue to an individual on the disposal of an asset, and
(b) the individual does not receive consideration for the disposal of an amount equal to the market value of the asset.
(2) For the purposes of this Chapter treat the asset as deriving from the chargeable gains.
Where—
(a) income or foreign chargeable gains are treated as arising or accruing, and
(b) by virtue of anything done in relation to anything regarded as deriving from the income or chargeable gains, the income or chargeable gains would otherwise be regarded as remitted to the United Kingdom before the time when they are treated as arising or accruing,
treat the income or chargeable gains as remitted to the United Kingdom at that time.
(1) Money that is brought to the United Kingdom by way of one or more direct payments to the Commissioners is to be treated as not remitted to the United Kingdom—
(a) if the payments are made in relation to a tax year to which section 809H applies, and
(b) if, or to the extent that, the payments do not exceed £30,000.
(2) Subsection (1) does not apply to a payment if, or to the extent that, it is repaid by the Commissioners.
(1) This section applies to income or chargeable gains if—
(a) the income or gains would (but for subsection (2)) be regarded as remitted to the United Kingdom because conditions A and B in section 809L are met,
(b) condition A in section 809L is met because a service is provided in the United Kingdom (“the relevant UK service”), and
(c) condition B in section 809L is met because section 809L(3)(a) or (b) applies to the consideration for the relevant UK service (“the relevant consideration”).
(2) The income or chargeable gains are to be treated as not remitted to the United Kingdom if the following conditions are met; but this is subject to subsection (5).
(3) Condition A is that the relevant UK service relates wholly or mainly to property situated outside the United Kingdom.
(4) Condition B is that the whole of the relevant consideration is given by way of one or more payments to one or more bank accounts held outside the United Kingdom by or on behalf of the person who provides the relevant UK service.
(5) Subsection (2) does not apply if the relevant UK service relates (to any extent) to the provision in the United Kingdom of—
(a) a benefit that is treated as deriving from the income by virtue of section 735, or
(b) a relevant benefit within the meaning of section 87B of TCGA 1992 that is treated as deriving from the chargeable gains by virtue of that section.
(6) Sections 275 to 275C of TCGA 1992 (location of assets) apply for the purposes of subsection (3) as they apply for the purposes of TCGA 1992.
(1) Exempt property which is brought to, or received or used in, the United Kingdom in circumstances in which section 809L(2)(a) applies is to be treated as not remitted to the United Kingdom.
(2) Subsections (3) to (5) set out the cases in which property is exempt property.
(3) Property is exempt property if it meets the public access rule (see sections 809Z and 809Z1).
(4) Clothing, footwear, jewellery and watches that derive from relevant foreign income are exempt property if they meet the personal use rule (see section 809Z2).
(5) Property of any description that derives from relevant foreign income is exempt property if—
(a) the property meets the repair rule (see section 809Z3),
(b) the property meets the temporary importation rule (see section 809Z4), or
(c) the notional remitted amount (see section 809Z5) is less than £1,000.
(1) Property that ceases to be exempt property is to be treated as having been remitted to the United Kingdom at the time it ceases to be exempt property.
(2) Property ceases to be exempt property in either of the following cases.
(3) The first case is where the whole or part of the exempt property is sold, or otherwise converted into money, whilst it is in the United Kingdom.
(4) The second case is where the property—
(a) is exempt property only because it meets one or more of the relevant rules,
(b) ceases to meet that rule, or all of those rules, whilst it is in the United Kingdom, and
(c) does not meet any other relevant rule.
(5) In this section—
“money” includes—
a traveller’s cheque,
a promissory note,
a bill of exchange, and
any other—
instrument that is evidence of a debt, or
voucher, stamp or similar token or document which is capable of being exchanged for money, goods or services, and
“relevant rule” means—
the public access rule,
the personal use rule,
the repair rule, and
the temporary importation rule.
(1) Property meets the public access rule if conditions A to D are met.
(2) Condition A is that the property is—
(a) a work of art,
(b) a collectors' item, or
(c) an antique,
within the meaning of Council Directive 2006/112/EC (see, in particular, Annex IX to that Directive).
(3) Condition B is that—
(a) the property is available for public access at an approved establishment,
(b) the property is to be available for public access at an approved establishment and, in connection with its being so available, is in transit to, or in storage at, public access rule premises, or
(c) the property has been available for public access at an approved establishment and, in connection with its having been so available, is in transit from, or in storage at, public access rule premises.
(4) Property is “available for public access” at an approved establishment if the property is—
(a) on public display at the establishment,
(b) held by the establishment and made available to the public on request for viewing or for educational use, or
(c) held by the establishment for public exhibition in connection with the sale of the property.
(5) An “approved establishment” is—
(a) an approved museum, gallery or other institution within the meaning of Group 9 of Schedule 2 to the Value Added Tax (Imported Goods) Relief Order 1984, or
(b) any other person, premises or institution designated (or of a description designated) by the Commissioners.
(6) “Public access rule premises” are—
(a) premises in the United Kingdom at which the property is to be, or has been, available for public access, or
(b) other commercial premises in the United Kingdom used by the approved establishment for the storage of property in advance of its being, or after its having been, available for public access at the approved establishment.
(7) Condition C is that, during the relevant period, the property meets condition B for no more than—
(a) two years, or
(b) such longer period as the Commissioners may specify.
(8) “The relevant period” means the period—
(a) beginning with the importation of the property, and
(b) ending when it ceases to be in the United Kingdom after that importation.
(9) “Importation” means the property being brought to, or received or used in, the United Kingdom in circumstances in which section 809L(2)(a) applies.
(10) Condition D is that the property attracts a relevant VAT relief (see section 809Z1).
(1) Property “attracts a relevant VAT relief” if any of conditions 1 to 4 is met.
(2) Condition 1 is that article 5(1) of the Value Added Tax (Imported Goods) Relief Order 1984 applies in relation to the importation of the property by virtue of Group 9 of Schedule 2 to that Order (importation of works of art or collectors' pieces by museums etc).
(3) Condition 2 is that article 5(1) would so apply if the following requirements were disregarded—
(a) the requirement that the importation be from a third country, and
(b) the requirement that the purpose of the importation be a purpose other than sale.
(4) Condition 3 is that article 576(3)(a) of Commission Regulation (EEC) No 2454/93 (relief from import duties for works of art etc imported for the purposes of exhibition, with a view to possible sale) applies in relation to the importation of the property.
(5) Condition 4 is that article 576(3)(a) would so apply if the requirement that the importation be from a third country were disregarded.
(6) Where the property does not meet condition B in section 809Z at the time of its importation it is to be assumed for the purposes of this section that the property was imported on the day during the relevant period when the property first meets that condition.
(7) “The relevant period” and “importation” have the same meaning as in section 809Z and “imported” is to be read accordingly.
(1) Clothing, footwear, jewellery or watches meet the personal use rule if they—
(a) are property of a relevant person, and
(b) are for the personal use of a relevant individual.
(2) In this section—
(a) “relevant person” has the meaning given by section 809M, and
(b) “relevant individual” means an individual who is a relevant person by virtue of section 809M(2)(a), (b), (c) or (d) (the individual with income or gains, or a husband, wife, civil partner, child or grandchild).
(1) Property meets the repair rule for the whole of the relevant period if, during the whole of that period, the property meets the repair conditions.
(2) Property meets the repair rule for a part of the relevant period if—
(a) during the whole of that part of that period, the property meets the repair conditions, and
(b) during the whole of the other part of that period, or the whole of each other part of that period, the property meets the repair conditions or the public access rule.
(3) Property meets the repair conditions if the property—
(a) is under repair or restoration,
(b) is in transit from a place outside the United Kingdom to repair rule premises, in transit between such premises, or in storage at such premises, in advance of repair or restoration, or
(c) is in storage at such premises, in transit between such premises, or in transit from such premises to a place outside the United Kingdom, following repair or restoration.
(4) “Repair rule premises” means—
(a) premises in the United Kingdom that are to be used, or have been used, for the repair or restoration referred to in subsection (3)(b) or (c), or
(b) other commercial premises in the United Kingdom used by the restorer for the storage of property in advance of, or following, repair or restoration of property by the restorer.
(5) “Restorer” means the person who is to carry out, or has carried out, the repair or restoration referred to in subsection (3)(b) or (c).
(6) Property meets the repair conditions, or the public access rule, during the whole of a period, or the whole of part of a period, if the property meets those conditions or that rule—
(a) on the whole of, or on part of, the first day of that period or part period,
(b) on the whole of, or on part of, the last day of that period or part period, and
(c) on the whole of each other day of that period or part period.
(7) “The relevant period” has the same meaning as in section 809Z.
(1) Property meets the temporary importation rule if the total number of countable days is 275 or fewer.
(2) A “countable day” is a day on which, or on part of which, the property is in the United Kingdom by virtue of being brought to, or received or used in, the United Kingdom in circumstances in which section 809L(2)(a) applies (whether the current case, or a past case, when the property was so brought, received or used).
(3) A day is not a countable day if, on that day or any part of that day—
(a) the property meets the personal use rule,
(b) the property meets the repair rule, or
(c) the notional remitted amount in relation to the property is less than £1,000.
(4) A day on which, or on part of which, the property meets the public access rule (the “relevant day”) is not a countable day if any of conditions A to C is met.
(5) Condition A is that the property meets the public access rule during the whole of the period of importation in which the relevant day falls.
(6) Condition B is that—
(a) the property does not meet the public access rule during the whole of the period of importation in which the relevant day falls, and
(b) that period of importation—
(i) begins with a period of no public access, and
(ii) ends with a period of public access which immediately follows that period of no public access.
(7) Condition C is that—
(a) the property does not meet the public access rule during the whole of the period of importation in which the relevant day falls, and
(b) during the parts, or each of the parts of the period of importation during which the property does not meet the public access rule it meets the repair conditions.
(8) Section 809Z3(6) applies for the purposes of this section.
(9) “Period of importation” means a period that—
(a) begins when property is brought to, or received or used in, the United Kingdom in circumstances in which section 809L(2)(a) applies, and
(b) ends when the property ceases to be in the United Kingdom after having been so brought, received or used.
(10) “Period of no public access” means a period which is not a period of public access and “period of public access” means a period during the whole of which property meets the public access rule.
(1) The “notional remitted amount”, in relation to property, is the amount of income that would be taken to be remitted to the United Kingdom in relation to the property (if section 809X did not apply in relation to the property).
(2) If—
(a) property forms part of a set, and
(b) only part of the set is in the United Kingdom,
the notional remitted amount is such part of the amount specified in subsection (3) as is just and reasonable having regard to the part of the set that actually is in the United Kingdom.
(3) That amount is the amount that would be taken to be remitted to the United Kingdom if the complete set had been brought to, or received or used in, the United Kingdom, at the same time as the part in question.
Finance Act 2008