5(1)After Chapter 3 insert—U.K.
“CHAPTER 3AU.K.Charge to tax: other arrangements
464ACharge to tax: arrangements conferring benefit on participator
(1)This section applies if—
(a)a close company is at any time a party to tax avoidance arrangements, and
(b)as a result of those arrangements, a benefit is conferred (whether directly or indirectly) on an individual who is—
(i)a participator in the company, or
(ii)an associate of such a participator.
(2)But this section does not apply if, or to the extent that, the conferral of the benefit gives rise to—
(a)a charge to tax on the company under section 455, or
(b)a charge to income tax on the participator or associate.
(3)There is due from the company, as if it were an amount of corporation tax chargeable on the company for the accounting period in which the benefit is conferred on the participator or associate, an amount equal to 25% of the value of the benefit conferred.
(4)Tax due under this section in relation to a benefit conferred on a participator or associate is due and payable in accordance with section 59D of TMA 1970 on the day following the end of the period of 9 months from the end of the accounting period in which the benefit was conferred.
(5)If a company (C) controls another company (D), a participator in C is to be treated for the purposes of this section as being also a participator in D.
(6)For the purposes of this section, arrangements are “tax avoidance arrangements” if the main purpose, or one of the main purposes, of the arrangements is—
(a)to avoid or reduce, or obtain a relief or increased relief from, a charge to tax on the company under section 455, or
(b)to obtain a tax advantage for the participator or associate.
(7)In this section—
“arrangements” includes any arrangements, scheme or understanding of any kind, whether or not legally enforceable, involving a single transaction or two or more transactions, and
“tax advantage” has the meaning given in section 1139, reading references to tax in that section as references to income tax.
464BRelief in case of return payment to company
(1)Subsection (2) applies if a benefit has been conferred which gave rise to a charge to tax on the company under section 464A.
(2)Relief is to be given from that tax, or a proportionate part of it, if—
(a)a payment (“the return payment”) is made to the company in respect of the benefit, and
(b)no consideration is given for the return payment.
(3)Relief under this section is to be given on a claim, which must be made within 4 years from the end of the financial year in which the return payment is made to the company.
(4)Subsection (5) applies if the return payment is made on or after the day on which tax under section 464A becomes due and payable in relation to the benefit.
(5)Relief in respect of the return payment may not be given under this section at any time before the end of the period of 9 months from the end of the accounting period in which the return payment was made.
(6)Schedule 1A to TMA 1970 (claims and elections not included in return) applies to a claim for relief under this section unless—
(a)the claim is included (by amendment or otherwise) in the return for the period in which the benefit was conferred, and
(b)the relief may be given at the time the claim is made.”
(2)The amendment made by this paragraph has effect in relation to arrangements to which a close company becomes a party on or after 20 March 2013.