UK Act of Parliament
2012
United Kingdom
Finance Act 2012 (introduced Patent Box)
At a glance
Enforced by
What's here
6 compliance obligations, 1 practical guide
Penalty landscape
1 of 6 obligations carry up to 2 years imprisonment. 5 have no criminal penalty — flagged in the list below.
Who this Act binds
Business-side actors with duties under this Act, ranked by how often they appear.
- Any Person 2
Plus 4 non-business duties on Crown ministers, regulators, local authorities or tribunals — shown collapsed under each section below.
Relevant guidance
Practical guides for businesses affected by this Act, ordered by how closely they engage with it.
Direct — cites this Act
1 guidesOther Acts binding the same actors
For each actor bound by this Act, the other UK Acts that bind them most often. Useful for understanding the full compliance landscape facing each role.
Any Person also bound by 749 other Acts (top 5 shown)
- Human Medicines Regulations 2012 2012 110 duties
- Licensing Act 2003 2003 105 duties
- Merchant Shipping Act 1995 1995 97 duties
- Road Traffic Act 1988 1988 95 duties
- Air Navigation Order 2016 2016 86 duties
What this Act requires
Sections that create concrete duties on businesses or carry penalties. Procedural and definitional sections are folded into the “Browse other sections” expander at the bottom of each group. Click any section title to read the source text on legislation.gov.uk.
Part 1 — Income tax, corporation tax and capital gains tax
Browse 54 other sections in this Part — procedural / definitional / commencement
Charge for 2012-13 and rates for 2012-13 and subsequent tax years
Basic rate limit for 2012-13
Personal allowance for 2012-13 for those aged under 65
Personal allowances from 2013
Main rate of corporation tax for financial year 2012
Charge and main rate for financial year 2013
Small profits rate and fractions for financial year 2012
High income child benefit charge
Post-cessation trade or property relief: tax-generated payments or events
Property loss relief against general income: tax-generated agricultural expenses
Gains from contracts for life insurance etc
Settlements: income originating from settlors other than individuals
Champions League final 2013
Cars: security features not to be regarded as accessories
Termination payments to MPs ceasing to hold office
Employment income exemptions: armed forces
Taxable benefits: “the appropriate percentage” for cars for 2014-15
Qualifying time deposits
Profits arising from the exploitation of patents etc
Relief for expenditure on R&D
Real estate investment trusts
Treatment of the receipt of manufactured overseas dividends
Loan relationships: debts becoming held by connected company
Companies carrying on businesses of leasing plant or machinery
Corporate members of Lloyd's: stop-loss insurance and quota share contracts
Abolition of relief for equalisation reserves: general insurers
Election to accelerate receipts under s.26(4)
Deemed receipts under s.26(4): double taxation relief
Transfer of whole or part of the business
Abolition of relief for equalisation reserves: Lloyd's corporate members etc
Tax treatment of financing costs and income
Group relief: meaning of “normal commercial loan”
Company distributions
Annual exempt amount
Foreign currency bank accounts
Collective investment schemes: chargeable gains
Roll-over relief
Seed enterprise investment scheme
Enterprise investment scheme
Venture capital trusts
Plant and machinery: restricting exception for manufacturers and suppliers
Plant and machinery allowances: anti-avoidance
Plant and machinery allowances: fixtures
Expenditure on plant and machinery for use in designated assisted areas
Allowances for energy-saving plant and machinery
Plant and machinery: long funding leases
Foreign income and gains
Employer asset-backed pension contributions etc
Gifts to the nation
Gift aid: giving through self-assessment return
Relief for gift aid and other income of charities etc
Meaning of “community amateur sports club”
Site restoration payments
Changes of accounting policy
Part 2 — Insurance companies carrying on long-term business
Policyholders' rate of tax on policyholders' share of I - E profit
Amended 3 timesRules for determining policyholders' share of I - E profit
Amended 1 timeMeaning of “the adjusted amount”
Amended 3 timesMeaning of “the closing deferred policyholder tax balance” etc
Amended 1 timeApplication of Chapter
Amended 1 timeCommercial allocation of accounting profit or loss and tax adjustments
Amended 1 timeCarry forward of pre-1 April 2017 BLAGAB trade losses against subsequent profits
Amended 3 timesCarry forward of post-1 April 2017 BLAGAB trade losses against subsequent profits
Amended 3 timesExcess carried forward post-1 April 2017 losses: relief against total profits
Amended 3 timesFurther carry forward against subsequent profits of post-1 April 2017 loss not fully used
Amended 3 timesRestriction on deductions from BLAGAB trade profits
Amended 3 timesSection 124D: shock losses excluded from the restriction
Amended 3 timesGroup relief
Amended 1 timeRestrictions in respect of non-trading deficit
Amended 3 timesNo relief against policyholders' share of I - E profit
Amended 2 timesIntra-group transfers and demutualisation
Amended 3 timesSection 133: supplementary
Other duties (1) — Crown / regulator
- HMRC must decide on insurance transfer applications within 30 days Statutory regulator
Meaning of “the long-term business fixed capital”
Amended 1 timeMinor definitions
Amended 5 timesBrowse 82 other sections in this Part — procedural / definitional / commencement
Overview
Meaning of “life assurance business”
Meaning of “basic life assurance and general annuity business”
Section 57: meaning of “pension business”
Section 57: meaning of “child trust fund business”
Section 57: meaning of “individual savings account business”
Section 57: meaning of “overseas life assurance business”
Section 57: meaning of “protection business”
Meaning of “long-term business” and “PHI business”
Meaning of “contract of insurance” and “contract of long-term insurance”
Meaning of “insurance company”
Separate businesses for BLAGAB and other long-term business
Exception where BLAGAB small part of long-term business
Charge to tax on I - E profit
Exclusion of charge under s.35 of CTA 2009 etc
Rules for calculating I - E profit or excess BLAGAB expenses
Charge to tax on profits of non-BLAGAB long-term business
Companies carrying on only PHI business
The I - E basis
Meaning of “income”
Meaning of “BLAGAB chargeable gains” etc
Meaning of “adjusted BLAGAB management expenses”
Section 76: meaning of “ordinary BLAGAB management expenses” etc
Section 76: meaning of other expressions
Spreading of acquisition expenses
Section 79: meaning of “acquisition expenses”
Amounts treated as ordinary BLAGAB management expenses
Restrictions in relation to ordinary BLAGAB management expenses
General annuity business
General annuity business: meaning of “steep-reduction annuity” etc
General annuity business: payments made in pre-1992 accounting periods
Separate property businesses for BLAGAB etc
Losses from property businesses where land held for long-term business
Loan relationships, derivative contracts and intangible fixed assets
Miscellaneous income and losses
Investment return where risk in respect of policy or contract re-insured
Regulations under section 90(4): supplementary provision
Certain BLAGAB trading receipts to count as deemed I - E receipts
Minimum profits test
Adjustment of I - E profit or excess BLAGAB expenses
Use of non-BLAGAB allowable losses to reduce I - E profit
Expenses referable to exempt FOTRA profits
Application of Chapter
Commercial allocation
Application of sections 100 and 101
Assets wholly or partly matched to BLAGAB liabilities
Commercial allocation for disposals not wholly dealt with by section 100
Meaning of “BLAGAB non-taxable distributions” and “shareholders' share”
Deduction for current policyholder tax
Expenses or receipts for deferred policyholder tax
Application of Chapter
Allocations to policyholders
Dividends and other distributions
Index-linked gilt-edged securities
Receipts or expenses relating to long-term business fixed capital
UK life insurance companies
Overseas life insurance companies: rule corresponding to s.116
Transfers of business and transfers within a group
UK life insurance companies
Overseas life insurance companies: rule corresponding to s.119
Sections 119 and 120: supplementary
Assets forming part of long-term business fixed capital
Relief for BLAGAB trade losses against total profits
Relief for transferee in respect of transferor's excess BLAGAB expenses
Transfers between non-group companies: present value of in-force business
Re-insurance in the course of transfer of BLAGAB
Application of ss. 129 and 130 to transfers of non-BLAGAB long-term business
Anti-avoidance
Clearance procedure
Meaning of “group” of companies
Meaning of “BLAGAB trade profit” and “BLAGAB trade loss”
Meaning of assets that are “matched to” liabilities
Abbreviations
Index of defined terms, etc
Power to amend Part 2 etc
Power to amend definition of “insurance business transfer scheme” etc
Power to modify provisions applying to overseas life insurance companies
Orders and regulations
Minor and consequential amendments
Transitional provision
Commencement
Accounting periods straddling 1 January 2013
Part 3 — Friendly societies carrying on long-term business
Payments by non-qualifying societies treated as qualifying distributions
Amended 1 timeMinor definitions
Amended 1 timeIndex of defined terms
Amended 1 timeBrowse 27 other sections in this Part — procedural / definitional / commencement
Overview
Friendly societies subject to same basic rules as mutual insurers
Friendly societies subject to transfer of business rules
Exemption for certain BLAGAB or eligible PHI business
Meaning of “BLAGAB or eligible PHI business”
Meaning of “exempt” BLAGAB or eligible PHI business
Societies with no provision for assuring gross sums exceeding £2,000 etc
Transfers to friendly societies
Transfers from friendly societies to insurance companies etc
Exception in case of breach of maximum benefits payable to members
Maximum benefits payable to members
Section 160: supplementary
Section 160: statutory declarations
Directions given to old societies
Societies registered before 1 June 1973, etc
Incorporated friendly societies
Transfers from friendly societies to insurance companies etc
Transfers between friendly societies
Withdrawal of qualifying status
Transfer schemes under s.6(5) of FSA 1992
Exemption for unregistered friendly societies
Abbreviations
Regulations
Consequential amendments
Transitional provision
Commencement
Accounting periods straddling 1 January 2013
Part 4 — Controlled foreign companies and foreign permanent establishments
Browse 1 other section in this Part — procedural / definitional / commencement
Part 5 — Oil
Browse 4 other sections in this Part — procedural / definitional / commencement
Part 6 — Excise duties
Rates of duty and rebates from 1 August 2012 to 31 December 2012
Other duties (1) — Crown / regulator
- HMRC must apply specific fuel duty rates for Late 2012 Statutory regulator
Rebated fuel: private pleasure craft
Amended 1 timeAir passenger duty
Other duties (1) — Crown / regulator
- HMRC must implement changes to Air Passenger Duty rules Statutory regulator
Machine games duty
Other duties (1) — Crown / regulator
- HMRC must implement Machine Games Duty replacing previous licence fees Statutory regulator
Browse 7 other sections in this Part — procedural / definitional / commencement
Rates of tobacco products duty
Rates of alcoholic liquor duties
Repeal of drawback on British compounds and spirits of wine
Amusement machine licence duty
Rates of gaming duty
Remote gambling: double taxation relief
VED rates for light passenger vehicles, light goods vehicles, motorcycles etc
Part 7 — Value added tax
Browse 9 other sections in this Part — procedural / definitional / commencement
Changes to the categorisation of supplies
Exempt supplies
Supply of goods or services by public bodies
Relief from VAT on low value goods: restriction relating to Channel Islands
Group supplies using an overseas member
Face-value vouchers
Power to require notification of arrival of means of transport in UK
Non-established taxable persons
Administration of VAT
Part 8 — Other taxes
Rate in respect of residential property where consideration over £2m
Amended 1 timeHealth service bodies
Amended 2 timesBrowse 11 other sections in this Part — procedural / definitional / commencement
Standard rate of landfill tax
Landfill sites in Scotland
Climate change levy
Indexation of rate bands
Gifts to charities etc
Settled property: effect of certain arrangements
The bank levy
Prevention of avoidance: subsales etc
Higher rate for certain transactions
Disclosure of stamp duty land tax avoidance schemes
Collective investment schemes: stamp duty and stamp duty reserve tax
Part 9 — Miscellaneous matters
Tax consequences of financial sector regulation
Amended 2 timesTax agents: dishonest conduct
Amended 2 timesBrowse 8 other sections in this Part — procedural / definitional / commencement
Agreement between UK and Switzerland
Penalties: offshore income etc
International military headquarters, EU forces, etc
Removal of special provision for incapacitated persons and minors
Information powers
PAYE regulations: information
New tax on ownership of high-value residential properties or dwellings
Repeals of miscellaneous reliefs etc
Part 10 — Final provisions
Browse 2 other sections in this Part — procedural / definitional / commencement
Interpretation
Short title
Schedules
High income child benefit charge
- Notify HMRC and pay the High Income Child Benefit Charge Any Person
Tax agents: dishonest conduct
2 years imprisonment- Conceal or destroy documents after a conduct notice Any Person
Browse 37 other Schedules — structural / supplementary
Tax treatment of financing costs and income
Enterprise investment scheme
Venture capital schemes
Expenditure on plant and machinery for use in designated assisted areas
Foreign income and gains
Employer asset-backed pension contributions etc
Gifts to the nation
Relief in respect of gift aid and other income
Part 2: transitional provision
Part 3: consequential amendments
Controlled foreign companies and foreign permanent establishments
Reduction of supplementary charge for certain oil fields
Air passenger duty
Machine games duty
Remote gambling: double taxation relief
Categorisation of supplies
Non-established taxable persons
Administration of VAT
Climate change levy
Climate change levy: climate change agreements
Stamp duty land tax: higher rate for certain transactions
International military headquarters, EU forces, etc
Profits arising from the exploitation of patents etc
Relief for expenditure on R&D
Real estate investment trusts
Seed enterprise investment scheme
Capital allowances for plant and machinery: anti-avoidance
Plant and machinery allowances: fixtures
Part 2: minor and consequential amendments
Part 3: transitional provision
Relief in respect of decommissioning expenditure
Anti-forestalling charge to VAT
Climate change levy: supplies subject to the carbon price support rates and combined heat and power stations
Inheritance tax: gifts to charities etc
Bank levy
Agreement between UK and Switzerland
Repeal of miscellaneous reliefs etc
Official guidance
Authoritative sources published by regulators or government explaining this legislation.
- OECD modified nexus approach for IP regimes (BEPS Action 5) (opens in a new tab) Detailed Guidance
- R&D tax relief guidance (opens in a new tab) Detailed Guidance
- Intellectual Property Office - apply for a patent (opens in a new tab) Detailed Guidance
- HMRC Patent Box technical guidance (CIRD200000) (opens in a new tab) Detailed Guidance
- Patent Box guidance on GOV.UK (opens in a new tab) Detailed Guidance
Enforcement and responsible bodies
The regulators that administer or enforce this legislation.
HM Revenue & Customs
Tax collection, customs duties, national insurance, tax credits, and enforcement of the National Minimum Wage. Regulates all UK businesses for tax compliance …
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Browse legislation
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Regulators
Learn more about the bodies that enforce this legislation.