Income Tax (Amendment No. 37) (Jersey) Law 2011

Income Tax (Amendment No. 37) (Jersey) Law 2011 Arrangement Article part 1 3 INTERPRETATION 3 1 Interpretation . 3 Part 2 3 Assessments, returns and ITIS 3 2 Articles 16 amended . 3 3 Article 17A amended . 4 4 Article 24 amended . 5 5 Articles 41C and 41H amended . 5 Part 3 6 schedule a 6 Taxation of quarrying, etc. 6 6 Article 51 amended . 6 7 Article 54A amended . 6 8 Article 55 amended . 6 9 Article 55A amended . 6 10 Article 62A substituted . 6 11 Article 131 amended . 7 12 Miscellaneous amendments . 7 Non-resident landlords 7 13 Schedule 3A amended . 7 part 4 10 schedule d 10 Pensions, annuities, etc. 10 14 Article 3 amended . 10 15 Article 62 amended . 10 16 Article 87 amended . 10 17 Article 131B amended . 10 18 Article 131CA amended . 11 Deemed dividends and full attribution 12 19 Articles 81B and 81N amended . 12 20 Article 85F and Article 85H amended . 13 21 Articles 81FA, 81FB, 81GA, 81GB and 85FA inserted . 14 22 Article 82B amended . 15 Taxation of importation and supply of hydrocarbon oils 16 23 Article 123CAA inserted . 16 part 5 16 closing provision 16 24 Citation and commencement 16 Income Tax (Amendment No. 37) (Jersey) Law 2011 A LAW to amend further the Income Tax (Jersey) Law 1961. Adopted by the States 10th December 2010 Sanctioned by Order of Her Majesty in Council 12th October 2011 Registered by the Royal Court 21st October 2011 THE STATES , subject to the sanction of Her Most Excellent Majesty in Council, have adopted the following Law – part 1 INTERPRETATION 1 Interpretation (1) In this Law “ principal Law” means the Income Tax (Jersey) Law 1961 [1] . (2) A reference in this Law to an Article or other provision of a Law by number only is a reference to the Article or other provision of that number in the principal Law. Part 2 Assessments, returns and ITIS 2 Articles 16 amended After Article 16(4) there shall be inserted the following paragraph – “(4A) A person required by a general or particular notice to deliver a statement and who is chargeable, for the period specified in the notice, under Case VIII of Schedule D on deemed dividends of a company or under Article 85F on the profits of a company, shall furnish in support of the statement – (a) the person’s computation of – (i) in the case of a person chargeable under Case VIII of Schedule D, the relevant profits of the company, as defined in Article 81B, and the person’s income chargeable under that Case in respect of the company, or (ii) in the case of a person chargeable under Article 85F, the relevant profits of the company, as defined in that Article, and the person’s portion of the relevant profits; and (b) a copy of the company’s accounts for each financial period by reference to which the computation is made.”. 3 Article 17A amended In Article 17A – (a) in paragraph (1) for the words “described in Article 16” there shall be substituted the words “or return”; (b) for paragraph (2) there shall be substituted the following paragraph – “(2) In this Article “specified time” means in relation to a requirement to deliver a statement or return in respect of a year of assessment that is imposed by a notice served in the following year – (a) in the case of a statement delivered on behalf of a person by another person whose business or profession includes the preparation of such statements and in the course of that other person’s business or profession, 6 p.m. on the last Friday in July in the year in which the notice is served; (b) in the case of a statement delivered by a company in respect of its own charge to tax, 6 p.m. on the last Friday in July in the year in which the notice is served; (c) in the case of a return, 6 p.m. on the last Friday in July in the year in which the notice is served; (d) in any other case, 6 p.m. on the last Friday in May in the year in which the notice is served.”; (c) for paragraph (3) there shall be substituted the following paragraph – “(3) Paragraph (1) shall not apply – (a) to an individual who is not liable to pay any tax for the period to which the statement relates; or (b) where the notice is served less than 30 days before the day on which the specified time applicable in the person’s case expires.”; (d) in paragraph (4) – (i) for the words “a person” there shall be substituted the words “an individual”, (ii) in sub-paragraph (a) for the words “the person’s” there shall be substituted the words “the individual’s”, (iii) in sub-paragraph (b) for the words “the person” in each place that they appear, there shall be substituted the words “the individual”; (e) in paragraph (7)(a) after the words “a statement” there shall be inserted the words “or return”; (f) in paragraph (7)(b) after the words “the statement” there shall be inserted the words “or return”; (g) after paragraph (12) there shall be added the following paragraph – “(12A) In this Article – “return” means a return required under Article 20B; “statement” means a statement required under Article 16.”. 4 Article 24 amended In Article 24, after paragraph (1) there shall be inserted the following paragraph – “(1A) A person chargeable who does not furnish any documents or information required, under Article 16(4A) or 16A, in support of a statement shall be taken, for the purposes of paragraph (1)(b), to have failed to deliver a full and proper statement.”. 5 Articles 41C and 41H amended (1) In Article 41C, after paragraph (7) there shall be inserted the following paragraphs – “(7A) Where it appears to the Comptroller that the issue of a revised rate in accordance with paragraph (7) would be insufficient to recover, in the remainder of the payment year, the employee’s outstanding liability to tax for the year of assessment or any preceding year, the Comptroller may – (a) in accordance with paragraph (7B), determine a revised rate applicable to the employee; and (b) issue a notice, in writing, to the employee and the employee’s employer, of the rate and the day from which the rate applies. (7B) Subject to paragraph (9), the rate determined shall be the rate required to recover, in the period commencing on the day the notice has effect to the end of the payment year, the balance of the revised sum of L in paragraph (2) that has not been recovered in the part of the payment year preceding that period.”. (2) In Article 41H, after paragraph (10)(a) there shall be inserted the following sub-paragraph – “(aa) in Article 41C(7A) for the words ‘liability to tax for the year of assessment or any preceding year’ there shall be substituted the words ‘estimated liability to tax for the payment year or liability to tax for any preceding year’;”. Part 3 schedule a Taxation of quarrying, etc. 6 Article 51 amended After Article 51(1)(b) there shall be added the following sub-paragraph – “(c) the annual profits or gains arising or accruing from the trade of the exploitation of land in Jersey by the exploration, excavation, excision, extrication, extirpation, exsiccation, expropriation or extraction or recovery of stone, minerals and other inorganic solid materials.”. 7 Article 54A amended (1) At the end of the heading to Article 54A there shall be added the words “or quarrying, etc.”. (2) In Article 54A after the words “Article 51(1)(b)” there shall be inserted the words “or (c)”. 8 Article 55 amended For Article 55(2) there shall be substituted the following paragraph – “(2) Articles 74 to 76A shall apply to taxation under Schedule A pursuant to Article 51(1)(b) or (c) as they apply to the taxation of any trade under Schedule D Case 1.”. 9 Article 55A amended (1) At the end of the heading to Article 55A there shall be added the words “and quarrying, etc.”. (2) In Article 55A after the words “Article 51(1)(b)” there shall be inserted the words “or (c)”. 10 Article 62A substituted For Article 62A there shall be substituted the following Article – “62A Disapplication of Schedule D where trade taxed under Schedule A Notwithstanding Article 61(1) and Article 62(1) Case I, tax under Schedule D shall not be charged on any profits or gains of a trade that are charged to tax under Schedule A by virtue of Article 51(1)(b) or (c).”. 11 Article 131 amended In Article 131(1) for the words “on the trade of property development pursuant to Article 51(1)(b)” there shall be substituted the words “under Article 51(1)(b) or (c)”. 12 Miscellaneous amendments In the following provisions, after the words “Article 51(1)(b)” there shall be inserted the words “or (c)” – (a) Article 3(1), in sub-paragraph (c) of the definition “earned income”; (b) Article 16(4); (c) Article 22(3); (d) Article 51A(2); (e) Article 92B(5), in the definition “qualifying income”; (f) Article 107A(1); (g) Article 108(1). Non-resident landlords 13 Schedule 3A amended In Schedule 3A – (a) in paragraph 3 – (i) at the end of sub-paragraph (1) there shall be added the words “or, if a notice has been issued under sub-paragraph (3A), at the rate specified in the notice”, (ii) after sub-paragraph (3) there shall be inserted the following sub-paragraphs – “(3A) If the non-resident has been assessed to, but has not paid tax on, income in Jersey for any preceding year, the Comptroller may, for the purpose of collection of that tax, issue a written notice to the agent, specifying a rate of tax exceeding the standard rate but not exceeding – (a) in a case where the non-resident has arrears for one year of assessment, 25%; (b) in a case where the non-resident has arrears of tax for 2 years of assessment, 30%; (c) in a case where the non-resident has arrears of tax for 3 or more years of assessment, 35%. (3B) The Comptroller shall send a copy of a notice issued under sub-paragraph (3A) to the non-resident at the address provided by the agent in accordance with paragraph 2(3)(b) or, if none has been provided, at the address of the property in Jersey.”; (b) in paragraph 4 – (i) at the end of sub-paragraph (2) there shall be added the words “or, if a notice has been issued under sub-paragraph (3A), at the rate specified in the notice”, (ii) after sub-paragraph (3) there shall be inserted the following sub-paragraphs – “(3A) If the non-resident has been assessed to, but has not paid tax on, income in Jersey for any preceding year, the Comptroller may, for the purpose of collection of that tax, issue a written notice to the tenant, specifying a rate of tax exceeding the standard rate but not exceeding the maximum rate that would apply in the non-resident’s case by virtue of paragraph 3(3A). (3B) The Comptroller shall send a copy of a notice issued under sub-paragraph (3A) to the non-resident at the address provided by the tenant in accordance with sub-paragraph (5) or, if none has been provided, at the address of the property in Jersey.”; (c) after paragraph 4 there shall be inserted the following paragraph – “4A Power of Comptroller to direct tenant to account for tax (1) This paragraph applies where – (a) rent in respect of property in Jersey is not received by an agent on behalf of a non-resident; and (b) the tenant is liable to pay the non-resident or another person on behalf of the non-resident (other than an agent) rent of £25,000 per annum or less or, where the tenancy is for less than a year, the proportionate amount of that sum, which is determined by the duration of the tenancy in that year. (2) The tenant, when directed to do so by a written notice issued by the Comptroller, shall, before paying rent to the non-resident or another person on behalf of the non-resident, deduct from the rent, and retain, tax at the standard rate or such higher rate as is specified in the notice in accordance with sub-paragraph (3). (3) If the non-resident has been assessed to, but has not paid, tax on income in Jersey for any year preceding the year in which the notice is issued, the Comptroller may, for the purpose of collecting that tax, specify in the notice a rate exceeding the standard rate but not exceeding the maximum rate that would apply in the non-resident’s case by virtue of paragraph 3(3A). (4) The Comptroller shall send a copy of a notice issued under sub-paragraph (2) to the non-resident at the address provided by the tenant in accordance with paragraph 4(5) as applied by sub-paragraph (5) of this paragraph or, if none has been provided, at the address of the property in Jersey. (5) Sub-paragraphs (4) to (13) of paragraph 4 shall apply for the purposes of this paragraph as if any reference in them to the deduction and retention of monies pursuant to sub-paragraph (2) of that paragraph was a reference to the deduction and retention of monies pursuant to sub-paragraph (2) of this paragraph.”; (d) in paragraph 6(1) after the words “paragraph 4” there shall be inserted the words “or 4A”; (e) for paragraph 8 there shall be substituted the following paragraphs – “8 Treatment of amounts remitted to Comptroller and recovery of arrears (1) Subject to sub-paragraph (2), the Comptroller shall receive an amount remitted under paragraph 3(8) or 4(8) or an amount proved to have been deducted, by virtue of paragraph 3(11) or 4(11), as a payment of tax by the non-resident for the year of assessment for which the non-resident is charged under Schedule A in respect of the rent pursuant to Article 51A(1). (2) Where an amount remitted under paragraph 3(8) or 4(8), or proved to have been deducted by virtue of paragraph 3(11) or 4(11), is greater than the tax payable by the non-resident as described in sub-paragraph (1), the excess shall be applied towards the payment of the non-resident’s liability to tax, whether under Schedule A or Schedule D, for any earlier year of assessment. (3) References in sub-paragraphs (1) and (2) to sub-paragraphs (8) and (11) of paragraph 4 include those sub-paragraphs as applied by paragraph 4A(5). (4) The fact that the Comptroller has issued a notice under paragraph 3(3A) or 4(3A) or a notice under paragraph 4A(2) specifying a rate higher than the standard rate shall not prevent the Comptroller pursuing, by any other means, the recovery of tax on income in Jersey that is due from the non-resident for any year preceding the year in which the notice is issued. 8A Right of appeal (1) A non-resident aggrieved by a notice issued under paragraph 3(3A) or 4(3A) or a notice under paragraph 4A(2) specifying a rate higher than the standard rate may appeal to the Commissioners, on giving notice in writing to the Comptroller within 40 days of the issue of the notice. (2) The rate specified in the notice issued under paragraph 3(3A), 4(3A) or 4A(2) shall apply notwithstanding that an appeal is pending under sub-paragraph (1). (3) Save as provided in sub-paragraphs (1) and (2), Part 6 shall apply, with the necessary modifications, as it applies to an appeal against any assessment.”. part 4 schedule d Pensions, annuities, etc. 14 Article 3 amended In Article 3(1) – (a) after the definition “accounting date” there shall be inserted the following definition – “ ‘annuity equivalent’ has the meaning given in Article 131CA(1)(a);”; (b) in the definition “earned income” the words “and” shall be deleted at the end of sub-paragraph (b) and added after sub-paragraph (c) together with the following sub-paragraph – “(d) any other payment required by any provision of this Law to be treated as or deemed to be earned income;”. 15 Article 62 amended In Article 62(1), in Case II, the word “and” shall be deleted at the end of sub-paragraph (b) and added after sub-paragraph (c) together with the following sub-paragraph – “(d) annuity equivalents;”. 16 Article 87 amended In Article 87(1) – (a) in sub-paragraph (a) after the word “annuity” there shall be inserted the words “, annuity equivalent”; (b) in the full-out words, for the words “in the case of an annuity,” there shall be substituted the words “in the case of an annuity or annuity equivalent,”. 17 Article 131B amended In Article 131B – (a) in paragraph (3)(d) the words “if the individual were to retire at that date” shall be deleted; (b) for paragraph (3)(e) and (f) there shall be substituted the following sub-paragraphs – “(e) the individual may elect to commute the whole of the fund in respect of which, if the election was not made, the payment of the annuity to him or her would otherwise commence by reason of his or her serious ill health, as defined in the contract; (f) the individual may elect to receive a lump sum by way of commutation of the whole of the fund in respect of which, if the election was not made, the payment of the annuity to him or her would otherwise commence if – (i) the individual has attained the age of 60 years, and (ii) the aggregate of – (A) the value of the fund at the time of the election, and (B) all lump sums that the individual has previously elected to receive under this sub-paragraph, under Article 131CA(4)(g) or under Article 5(2D) of the Income Tax (Superannuation Funds) (Jersey) Order 1972 [2] , does not exceed £30,000;”; (c) in paragraph (3)(g) for the words “after his or her retirement,” there shall be substituted the words “after the commencement of benefits,”; (d) in paragraph (8C) for the word “retirement” there shall be substituted the words “the commencement of benefits”; (e) after paragraph (10) there shall be added the following paragraph – “(11) For the purposes of paragraphs (3)(g) and (8C) benefits commence upon whichever is the earlier of – (a) an election by the individual who made the contract to receive a lump sum by way of commutation of part of the fund; (b) the commencement of payment of the annuity to the individual who made the contract.”. 18 Article 131CA amended In Article 131CA – (a) in paragraph (3)(d)(ii) the words “if the individual were to retire at that date” shall be deleted; (b) for paragraph (4)(f) and (g) there shall be substituted the following sub-paragraphs – “(f) for the primary beneficiary to elect to receive a lump sum by way of commutation of the whole of the fund in respect of which, if the election was not made, the payment of annuity equivalents to him or her would otherwise commence by reason of his or her serious ill health, as defined in the scheme; (g) for the primary beneficiary to elect to receive a lump sum by way of commutation of the whole of the fund in respect of which, if the election was not made, the payment of annuity equivalents to him or her would otherwise commence if – (i) he or she has attained the age of 60 years, and (ii) the aggregate of – (A) the value of the fund at the time of the election, and (B) all lump sums that the individual has previously elected to receive under this sub-paragraph, under Article 131B(3)(f) or under Article 5(2D) of the Income Tax (Superannuation Funds) (Jersey) Order 1972, does not exceed £30,000;”; (c) in paragraph (4)(h) for the words “to one or more secondary beneficiaries if a primary beneficiary dies following his or her retirement,” there shall be substituted the words “to the secondary beneficiary if the primary beneficiary dies following the commencement of benefits,”; (d) in paragraph (9) – (i) for the words “after commencement of an annuity equivalent to the primary beneficiary,” there shall be substituted the words “after the commencement of benefits,”, (ii) the words “subject to paragraph (9A)” shall be deleted; (e) in paragraph (9A) – (i) after the words “to the secondary beneficiary” there shall be inserted the words “, or to the primary beneficiary’s estate,”, (ii) for the word “retirement” there shall be substituted the words “the commencement of benefits”; (f) after paragraph (13) there shall be added the following paragraph – “(14) For the purposes of paragraphs (4)(h), (9) and (9A) benefits commence upon whichever is the earlier of – (a) an election by the primary beneficiary to receive a lump sum by way of commutation of part of the fund; (b) the commencement of payment of annuity equivalents to the primary beneficiary.”. Deemed dividends and full attribution 19 Articles 81B and 81N amended (1) In Article 81B(1) for the definition “relevant dividend” there shall be substituted the following definition – “ ‘relevant dividend’ means, in relation to the relevant profits of a financial period of a company, so much of any dividend as is paid or issued out of those profits, in respect of a share comprised in the ordinary share capital of the company, on or before – (a) if the last day of the following financial period is 31st December, that day; or (b) in any other case, 31st December next after the end of the following financial period;”. (2) In Article 81N(1) for sub-paragraph (b) there shall be substituted the following sub-paragraph – “(b) a dividend that is not a relevant dividend is paid or issued out of those profits, in respect of a share comprised in the ordinary share capital of the company.”. 20 Article 85F and Article 85H amended (1) In Article 85F – (a) in paragraph (8) for the words “Subject to paragraphs (10), (11) and (12),” there shall be substituted the words “Subject to paragraphs (10) to (12) and (12A),”; (b) in paragraph (12) after the word “shall” there shall be inserted the words “, subject to paragraph (12A),”; (c) after paragraph (12) there shall be inserted the following paragraph – “(12A) There shall be deducted from the portion of the company’s relevant profits of a financial period on which an individual is assessed and taxed, whether the portion is determined in accordance with paragraph (8) or an election under paragraph (10), the sum of the dividends paid or issued out of those relevant profits to the individual on or before – (a) if the last day of the financial period is 31st December, that day; or (b) in any other case, 31st December next after the end of the financial period, in respect of shares comprised in the ordinary share capital of the company that are owned by the individual.”. (2) For Article 85H there shall be substituted the following Article – “85H Credit for tax on full attribution An individual who has paid tax on his or her portion of a company’s relevant profits for a financial period, pursuant to Article 85F, shall be entitled to a credit, not exceeding the amount of tax paid, against his or her liability to pay tax on any dividend that – (a) is paid or issued out of those relevant profits in respect of a share comprised in the ordinary share capital of the company; and (b) is not deducted, by virtue of Article 85F(12A), in determining that portion.”. 21 Articles 81FA, 81FB, 81GA, 81GB and 85FA inserted (1) After Article 81F there shall be inserted the following Articles – “81FA Election on disposal of whole of shareholding: Jersey trading companies (1) This Article applies where – (a) the whole of the ordinary share capital of a Jersey trading company is disposed of; and (b) the disposal occurs on a day other than the last day of a financial period of the company. (2) The person or persons disposing of the shares and the person or persons acquiring the shares may jointly elect, in writing, for Articles 81E and 81F to apply as if the portion of the financial period ending on the day of the disposal and the remainder of the financial period, were separate financial periods. (3) An election under paragraph (2) must be made no later than 90 days after the end of the financial period in which the disposal occurs. 81FB Disposal of shareholding pursuant to court order: Jersey trading companies (1) This Article applies where – (a) a court or tribunal orders the disposal of shares comprised in the ordinary share capital of a Jersey trading company by or to an individual to whom, whether immediately before or by virtue of the disposal, Article 81D applies; and (b) the disposal occurs on a day other than the last day of a financial period. (2) The court or tribunal may order that Articles 81E and 81F shall apply as if an election had been made under Article 81FA(2).”. (2) After Article 81G there shall be inserted the following Articles – “81GA Election on disposal of whole of shareholding: Jersey financial services companies (1) This Article applies where – (a) the whole of the ordinary share capital of a Jersey financial services company is disposed of; and (b) the disposal occurs on a day other than the last day of a financial period of the company. (2) The person or persons disposing of the shares and the person or persons acquiring the shares may jointly elect, in writing, for Article 81G to apply as if the portion of the financial period ending on the day of the disposal and the remainder of the financial period, were separate financial periods. (3) An election under paragraph (2) must be made no later than 90 days after the end of the financial period in which the disposal occurs. 81GB Disposal of shareholding pursuant to court order: Jersey financial services companies (1) This Article applies where – (a) a court or tribunal orders the disposal of shares comprised in the ordinary share capital of a Jersey financial services company by or to an individual to whom, whether immediately before or by virtue of the disposal, Article 81G applies; and (b) the disposal occurs on a day other than the last day of a financial period. (2) The court or tribunal may order that Article 81G shall apply as if an election had been made under the Article 81GA(2).”. (3) After Article 85F there shall be inserted the following Article – “85FA Disposal of shareholding pursuant to court order: full attribution (1) This Article applies where – (a) a court or tribunal orders the disposal of shares comprised in the ordinary share capital of a company subject to full attribution by or to an individual to whom, whether immediately before or by virtue of the disposal, Article 85F applies; and (b) the disposal occurs on a day other than the last day of a financial period. (2) The court or tribunal may order that Article 85F shall apply as if the portion of the financial period ending on the day of the disposal and the remainder of the financial period were separate financial periods.”. 22 Article 82B amended After Article 82B(2) there shall be inserted the following paragraph – “(2A) Notwithstanding paragraph (2) the individual may be assessed and taxed if the trustees do not comply with any requirement imposed by or under this Law.”. Taxation of importation and supply of hydrocarbon oils 23 Article 123CAA inserted After Article 123C there shall be inserted the following Article – “123CAA Exception for profits of importation and supply of hydrocarbon oil (1) Notwithstanding Article 123C(2), the annual profits or gains of a company to which Article 123C applies which arise from the trade of importing and supplying hydrocarbon oil shall be taxed at the standard rate. (2) Notwithstanding Article 123C(2), where a company to which Article 123C applies and which carries on the trade of importing and supplying hydrocarbon oil (the ‘importing company’) supplies the oil to another company which is – (a) a company to which Article 123C applies; and (b) a subsidiary of, or connected with, the importing company, the annual profits or gains of that other company which arise from the trade of supplying hydrocarbon oil shall be taxed at the standard rate. (3) In this Article ‘hydrocarbon oil’ means any petroleum oil, coal tar or oil produced from coal, shale, peat or any other bituminous substance, or any liquid hydrocarbon, except any hydrocarbon or bituminous or asphaltic substance as is – (a) solid or semi-solid at a temperature of 15 degrees Celsius; or (b) gaseous at a temperature of 15 degrees Celsius and under a pressure of 1013.25 millibars, that is ordinarily used as fuel for the propulsion of any vehicle, vessel or aircraft or as boiler or furnace fuel.”. part 5 closing provision 24 Citation and commencement (1) This Law may be cited as the Income Tax (Amendment No. 37) (Jersey) Law 2011. (2) Subject to paragraphs (3) and (4), this Law shall come into force on 1st January 2011. (3) The following Articles shall have effect for the year of assessment 2011 and ensuing years – (a) Articles 6, 7, 8, 9, 10, 11 and 12; (b) Articles 19, 20 and 21. (4) Article 23 shall have effect for the year of assessment 2012 and ensuing years. m.n. de la haye Greffier of the States [1] chapter 24.750 [2] chapter 24.750.60