Finance (Tax Appeals) Act 2015

37.

Consequential amendments to Parts 18A to 24 of Act of 1997

37. (1) Part 18A of the Act of 1997 is amended by deleting subsection (1) of section 531M.

(2) Part 18C of the Act of 1997 is amended by deleting subsection (1) of section 531AJ.

(3) Part 18D of the Act of 1997 is amended by deleting paragraph (c) of section 531AAA.

(4) Part 19 of the Act of 1997 is amended—

(a) in section 544—

(i) in subsection (5) by substituting “be just and reasonable” for “be such method as appears to the inspector or on appeal to the Appeal Commissioners to be just and reasonable”, and

(ii) in subsection (7) by substituting “any determination on an appeal” for “any decision on an appeal”,

and

(b) in section 604—

(i) in subsection (7) by inserting “against an assessment” after “on an appeal”,

(ii) in subsection (8)(a) by substituting “the period” for “that period if it is later”,

(iii) by substituting the following for paragraph (b) of subsection (8):

“(b) failing such agreement, the question shall be determined by the inspector as respects either the whole or specified parts of the period of ownership in question.”,

(iv) by deleting all the words in subsection (8) that follow paragraph (b) of it (the subject of the immediately preceding amendment), and

(v) by inserting the following after subsection (8):

“(8A) The inspector shall give notice of a determination under subsection (8)(b) to the individual who, if aggrieved by the determination, may appeal it to the Appeal Commissioners, in accordance with section 949I, within the period of 30 days after the date of the notice of that determination.”.

(5) Part 20 of the Act of 1997 is amended in section 621 by substituting the following for subsections (6) and (7):

“(6) A person making an ultimate disposal who is or has at any time been a member of the group of companies referred to in subsection (3) or (4) shall, for the purposes of making a self-assessment, reduce any loss on the disposal to such an extent that the loss does not reflect any diminution in the value of the company’s assets attributable to a depreciatory transaction; but, if the person making the ultimate disposal is not a member of that group when disposing of the shares or securities, no reduction of the loss shall be made by reference to a depreciatory transaction that took place when that person was not a member of that group.

(7) (a) Subject to paragraph (b), the inspector, in making an assessment, or the Appeal Commissioners, on an appeal against an assessment, shall reduce any allowable loss to such extent as appears to the inspector or the Appeal Commissioners to be just and reasonable on the basis that the loss ought not to reflect any diminution in the value of the company’s assets attributable to a depreciatory transaction.

(b) Allowance may be made for any transaction, other than a depreciatory transaction, on or after 6 April 1974 that has enhanced the value of the company’s assets and depreciated the value of the assets of any other member of the group.”.

(6) Part 21 of the Act of 1997 is amended by substituting the following for section 638:

“Apportionment of amounts

638. (1) Where, in relation to an apportionment to be made for the purposes of this Part—

(a) it appears, at the time of the apportionment, that it is material as respects the liability to tax (for whatever period) of 2 or more companies, and

(b) it is not possible for a company making the apportionment and the appropriate inspector to agree on that apportionment,

the inspector shall determine the apportionment and give notice in writing of the determination to each company affected by that apportionment.

(2) A company aggrieved by a determination made under subsection (1) in respect of that company may appeal the determination to the Appeal Commissioners, in accordance with section 949I, within the period of 30 days after the date of the notice of that determination, for their determination of a just and reasonable apportionment.”.

(7) Part 22 of the Act of 1997 is amended in section 641(4)(c) by substituting “on a just and reasonable basis” for “as appear to the inspector or on appeal to the Appeal Commissioners to be just and reasonable”.

(8) Part 23 of the Act of 1997 is amended—

(a) in section 657(4)(a) —

(i) by substituting “and the assessment shall be amended as necessary so as to give effect to the election so made by the individual.” for “and -”, and

(ii) by deleting subparagraphs (i) and (ii),

(b) in section 658 by deleting subsections (7) and (8),

(c) in section 659 by deleting subsections (6) and (7),

(d) in section 664(4) —

(i) in paragraph (a) by substituting “as is properly attributable to the lease of the farm land, and after such apportionments of rent, expenses and other deductions as are necessary,” for “as is determined by the inspector and after such apportionments of rent, expenses and other deductions as are necessary, according to the best of the inspector’s knowledge and judgement, to be properly attributable to the lease of the farm land”, and

(ii) by deleting paragraph (b),

and

(e) in section 669—

(i) in subsection (1)(a) by substituting “as is just and reasonable” for “as appears to the inspector (or on appeal to the Appeal Commissioners) to be just and reasonable”,

(ii) in subsection (5)(a) by substituting “trading stock of such value as is just and reasonable” for “trading stock of such value as appears to the inspector to be just and reasonable”, and

(iii) by deleting paragraph (c) of subsection (5).

(9) Part 24 of the Act of 1997 is amended—

(a) in section 670 by substituting the following for subsection (14):

“(14) A person aggrieved by a decision of the inspector on an application by that person for an allowance under this section may appeal the decision to the Appeal Commissioners, in accordance with section 949I, within the period of 30 days after the date of the notice of the decision.”,

and

(b) by substituting the following for paragraph (b) of section 696B(3):

“(b) Any necessary apportionment in computing taxable field profits or taxable field expenditure of a company under paragraph (a) shall be made on a just and reasonable basis.”.