Income Tax (Amendment No. 38) (Jersey) Law 2011

Income Tax (Amendment No. 38) (Jersey) Law 2011 Arrangement Article part 1 3 interpretation 3 1 Interpretation . 3 part 2 3 full attribution – repeal 3 2 Articles 85F to 85H repealed . 3 3 Ancillary repeals and amendments – full attribution . 4 4 Schedule 5 amended . 4 part 3 6 limitation of liability to TAXATION OF deemed dividends 6 5 Articles 81CA and 81CB inserted . 6 6 Article 81E amended . 7 part 4 7 deemed dividends – repeal 7 7 Articles 81B, 81CA, 81CB and 81D to 81N repealed . 7 8 Ancillary repeals and amendments – deemed dividends . 7 9 Schedule 5 amended . 8 part 5 9 closing 9 10 Citation and commencement 9 Income Tax (Amendment No. 38) (Jersey) Law 2011 A LAW to amend further the Income Tax (Jersey) Law 1961 Adopted by the States 7th July 2011 Sanctioned by Order of Her Majesty in Council 16th November 2011 Registered by the Royal Court 9th December 2011 THE STATES , subject to the sanction of Her Most Excellent Majesty in Council, have adopted the following Law – part 1 interpretation 1 Interpretation A reference in this Law to an Article or other sub-division of a Law by number only is a reference to the Article or other sub-division of that number in the Income Tax (Jersey) Law 1961 [1] . part 2 full attribution – repeal 2 Articles 85F to 85H repealed Articles 85F to 85H and the cross heading preceding them are repealed. 3 Ancillary repeals and amendments – full attribution (1) In Article 3(1) the definition “company subject to full attribution” is deleted. (2) In Article 16 for paragraph (4A) there is substituted 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 shall furnish in support of the statement – (a) the person’s computation of the relevant profits of the company, as defined in Article 81B, and the person’s income chargeable under Case VIII in respect of the company; and (b) a copy of the company’s accounts for each financial period by reference to which the computation is made.”. (3) In Article 20B – (a) in paragraph (3) sub-paragraph (g) is deleted; (b) in paragraph (5) for the words “to (g)” there are substituted the words “to (f)”; (c) in paragraph (6) for the words “Article 81K, 81L or 85G,” there are substituted the words “Article 81K or 81L,”. (4) In Article 81O(1)(a) the words “and which is not a company subject to full attribution” are deleted. (5) In Article 82(1) for the words “and to Articles 82B and 85F” there are substituted the words “and to Article 82B”. (6) In Article 82B(1) sub-paragraph (b), and the word “or” following sub-paragraph (a), are deleted. (7) In Article 133 – (a) in paragraph (4) the words “Subject to paragraph (4A),” are deleted; (b) paragraph (4A) is deleted. 4 Schedule 5 amended After paragraph 6 of Schedule 5 the following paragraphs are added – “7 Income Tax (Amendment No. 38) (Jersey) Law 2011: saving for liability to taxation by full attribution (1) Notwithstanding their repeal by Article 2 of the Income Tax (Amendment No. 38) (Jersey) Law 2011 [2] , Articles 85F to 85G shall continue to have effect for the years of assessment 2008 (in accordance with paragraph 6 of this Schedule), 2009, 2010 and, subject to sub-paragraphs (3) to (5), 2011. (2) The provisions of this Law amended by Article 3 of the Income Tax (Amendment No. 38) (Jersey) Law 2011 shall continue to have effect, as they were in force immediately before the commencement of Part 2 of that Law, for the purposes of the continuing operation of Articles 85F to 85G. (3) Sub-paragraphs (4) and (5) apply in the case of a company subject to full attribution which does not have a financial period ending on 31st December 2011. (4) Article 85F shall apply – (a) in the case of a company that, on 31st December 2011, has not completed its first financial period, as if the period beginning on the day the company is incorporated and ending on 31st December 2011 were the first financial period of the company; (b) in the case of any other company that does not have a financial period ending on 31st December 2011, as if the period – (i) beginning on the day following the end of the last financial period of the company preceding 31st December 2011, and (ii) ending on 31st December 2011, were a financial period of the company. (5) Article 85C(1) (as applied by Article 85F(6)) shall apply as if the operation of the rule in sub-paragraph (4)(b) were a change in the financial period for the company. (6) In this paragraph ‘first financial period’, in relation to a company, means the financial period beginning on the day the company is incorporated. 8 Income Tax (Amendment No. 38) (Jersey) Law 2011: entitlement to credit for tax paid on full attribution (1) 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 the 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. (2) Expressions used in sub-paragraph (1) have the same meaning as in Article 85F, as it continues to have effect by virtue of paragraph 7(1).”. part 3 limitation of liability to TAXATION OF deemed dividends 5 Articles 81CA and 81CB inserted After Article 81C the following Articles are inserted – “81CA Limitation of liability to taxation of deemed dividends from 2012 (1) Notwithstanding Article 81C(a), an individual shall not be liable to taxation under Articles 81D, 81E and 81F or under Article 81G in respect of relevant profits accruing to a company on or after 1st January 2012. (2) Notwithstanding Articles 81C(a), 81D(3)(b) and 81F, a final deemed dividend shall not be deemed to have been paid by reason of the occurrence of an event described in any of sub-paragraphs (a) to (e) of Article 81F, if the event occurs on or after 1st January 2012. (3) Notwithstanding Articles 81C(a) and 81G, an individual shall not be deemed to have received a dividend out of the relevant profits of a Jersey financial services company by reason of the occurrence of an event described in any of sub-paragraphs (a) to (e) of paragraph (3) of that Article, if the event occurs on or after 1st January 2012. 81CB Modification of liability to taxation of deemed dividends on profits arising in 2011 (1) Paragraph (2) applies in the case of a company – (a) in respect of which an individual may be liable to taxation under Articles 81D, 81E and 81F or under Article 81G; and (b) which does not have a financial period ending on 31st December 2011. (2) Articles 81D, 81E, 81F and 81G shall apply – (a) in the case of a company that, on 31st December 2011, has not completed its first financial period, as if the period beginning on the day the company is incorporated and ending on the 31st December 2011 were the first financial period of the company; (b) in the case of any other company that does not have a financial period ending on 31st December 2011, as if the period – (i) beginning on the day following the end of the last financial period of the company preceding 31st December 2011, and (ii) ending on 31st December 2011, were a financial period of the company. (3) Where – (a) an individual is deemed to receive an interim deemed dividend out of the relevant profits of a company for the company’s actual or deemed financial period ending on 31st December 2011; and (b) apart from this paragraph, the last day of the following financial period of the company would fall after 31st December 2012, Article 81E shall apply as if the last day of the following financial period of the company were the 31st December 2012. (4) In this Article ‘first financial period’, in relation to a company, means the financial period beginning on the day the company is incorporated.”. 6 Article 81E amended In Article 81E, for paragraph (4) there shall be substituted the following paragraph – “(4) Where the winding up of a company commences before the day that the interim dividend would be deemed to be received by an individual by virtue of paragraph (1), the interim dividend shall instead be deemed to be received by the individual on 31st December 2012 or, if earlier, the completion of the winding up of the company.”. part 4 deemed dividends – repeal 7 Articles 81B, 81CA, 81CB and 81D to 81N repealed Articles 81B, 81CA, 81CB and 81D to 81N are repealed. 8 Ancillary repeals and amendments – deemed dividends (1) In Article 3(1) the definition “deemed dividend” is deleted. (2) In Article 16 – (a) paragraph (4A) is deleted; (b) for paragraph (5) there is substituted the following paragraph – “(5) In this Article a reference to ownership, acquisition or disposal of a source shall, in the case of an individual, where the source is shares, be construed in accordance with Articles 82A and 82AA.”; (c) paragraphs (6) and (7) are deleted. (3) In Article 20B – (a) in paragraph (3), sub-paragraph (f) is deleted; (b) paragraphs (5), (6) and (7) are deleted; (c) in paragraph (8) the definition “relevant profits” is deleted. (4) In Article 61(1) – (a) the word “and” is added after sub-paragraph (c); (b) sub-paragraph (d) is deleted. (5) In Article 62(1) sub-paragraph (a) of Case VIII is deleted. (6) Article 81C(a) is deleted. (7) In Article 82(1) the words “and to Article 82B” are deleted. (8) Article 82B is repealed. 9 Schedule 5 amended After paragraph 8 of Schedule 5 the following paragraphs are added – “9 Income Tax (Amendment No. 38) (Jersey) Law 2011: liability to taxation of deemed dividends (1) Notwithstanding their repeal by Article 7 of the Income Tax (Amendment No. 38) (Jersey) Law 2011 [3] , Articles 81B, 81CA, 81CB and 81D to 81M shall continue to have effect for the years of assessment 2008 (in accordance with paragraph 6 of this Schedule) and 2009 to 2012. (2) The provisions of this Law amended by Article 8 of the Income Tax (Amendment No. 38) (Jersey) Law 2011 shall continue to have effect, as they were in force immediately before the commencement of Part 4 of that Law, for the purposes of the continuing operation of the Articles referred to in sub-paragraph (1). 10 Income Tax (Amendment No. 38) (Jersey) Law 2011: entitlement to credit for tax paid on deemed dividends (1) This paragraph applies where – (a) pursuant to Article 81D or 81G, a dividend is deemed to be received by an individual out of the relevant profits of a company for a relevant financial period; and (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. (2) Where this paragraph applies, an individual who has paid tax on a deemed dividend described in sub-paragraph (1)(a) shall be entitled to a credit, in an amount equal to the amount of tax paid, against his or her liability to tax on any dividend described in sub-paragraph (1)(b). (3) Expressions used in this paragraph shall be construed in accordance with the Articles referred to in paragraph 9(1), as they continue to have effect by virtue of paragraph 9(1).”. part 5 closing 10 Citation and commencement (1) This Law may be cited as the Income Tax (Amendment No. 38) (Jersey) Law 2011. (2) Part 4 of this Law comes into force on 1st January 2013. (3) The remainder of this Law comes into force on 1st January 2012. A.H. harris Deputy Greffier of the States [1] chapter 24.750 [2] L.27/2011 [3] L.27/2011