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Section 687 |
| | 15. - (1) In section 687 of the Taxes Act 1988 (payments under discretionary trusts) subsection (3) (amounts which may be set against the amount assessable on trustees) shall be amended as follows.
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(2) For paragraphs (a) and (aa) there shall be substituted-
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"(a) the amount of any tax on income arising to the trustees which (not being income the tax on which falls within paragraphs (a1) to (bc) below) is charged in pursuance of section 686 at the rate applicable to trusts or the Schedule F trust rate; |
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(a1) the amount of tax at a rate equal to the difference between the Schedule F ordinary rate and the Schedule F trust rate on any income of the trustees chargeable under Schedule F; |
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(a2) the amount of tax which, by virtue of section 233(1A), is charged, at a rate equal to the difference between the Schedule F ordinary rate and the Schedule F trust rate, on the amount or value of the whole or any part of any qualifying distribution included in the income arising to the trustees; |
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(aa) the amount of tax which, by virtue of section 233(1B), is charged, at a rate equal to the difference between the Schedule F ordinary rate and the Schedule F trust rate, on the amount or value of the whole or any part of any non-qualifying distribution included in the income arising to the trustees;". |
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(3) For paragraph (b) there shall be substituted-
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"(b) the amount of tax at a rate equal to the difference between the Schedule F ordinary rate and the Schedule F trust rate on any sum treated, under section 249(6), as income of the trustees;". |
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(4) After paragraph (b) there shall be inserted-
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"(bb) the amount of tax at a rate equal to the difference between the Schedule F ordinary rate and the Schedule F trust rate on any sum treated under section 421(1)(a) as income of the trustees; |
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(bc) the amount of tax at a rate equal to the difference between the Schedule F ordinary rate and the Schedule F trust rate on any sum treated under section 686A as income of the trustees;". |
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(5) This paragraph has effect for the year 1999-00 and subsequent years of assessment.
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Section 689B |
| | 16. - (1) Section 689B of the Taxes Act 1988 (order in which expenses of trustees are to be set against income) shall be amended as follows.
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(2) In subsection (1)-
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(a) in paragraph (a) (set against income within subsection (2) or (3) before other income) after "subsection (2)" there shall be inserted ", (2A)"; |
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(b) in paragraph (b) (set against income within subsection (2) before subsection (3)) after "subsection (2)" there shall be inserted "or (2A)"; and |
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(c) at the end of paragraph (b) there shall be added "and |
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(c) as set against so much (if any) of any income as is income falling within subsection (2) below before being set against income falling within subsection (2A) below". |
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(3) In subsection (2) (income against which expenses are to be first set)-
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(a) before paragraph (a) there shall be inserted- |
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"(za) so much of the income of the trustees as is income chargeable under Schedule F;"; and |
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(b) after paragraph (a) there shall be inserted- |
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"(aa) so much of the income of the trustees as is a non-qualifying distribution, within the meaning of section 233(1B);". |
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(4) After subsection (2) there shall be inserted-
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"(2A) Income falls within this subsection if it is income to which section 1A applies by virtue of its being equivalent foreign income falling within subsection (3)(b) of that section and chargeable under Case V of Schedule D."
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(5) In subsection (3) (income to which section 1A applies but which does not fall within subsection (2) of s.689B) after "subsection (2)" there shall be inserted "or (2A)".
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(6) This paragraph has effect for the year 1999-00 and subsequent years of assessment.
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Section 699 |
| | 17. - (1) In section 699 of the Taxes Act 1988 (relief from higher rate tax for inheritance tax on accrued income) in subsection (2) (definition of "excess liability")-
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(a) after "(so far as applicable in accordance with section 1A) the lower rate" there shall be inserted "or the Schedule F ordinary rate"; and |
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(b) for "any higher rate" there shall be substituted "the higher rate and the Schedule F upper rate". |
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(2) This paragraph has effect for the year 1999-00 and subsequent years of assessment.
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Section 703 |
| | 18. - (1) In section 703 of the Taxes Act 1988 (cancellation of tax advantage) in subsection (5)(b) (which requires a notice under that section to specify the amount equal to tax at the lower rate on the amount there mentioned) for "lower rate" there shall be substituted "Schedule F ordinary rate".
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(2) This paragraph has effect for the year 1999-00 and subsequent years of assessment.
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Section 709 |
| | 19. - (1) In section 709 of the Taxes Act 1988 (meaning of tax advantage etc) in subsection (2A) (references to a relief and to repayment of tax to include references to a tax credit and payment of any amount in respect of a tax credit) the words "and to a repayment of tax", "respectively" and "and to a payment of any amount in respect of a tax credit" shall be omitted.
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(2) This paragraph has effect for the year 1999-00 and subsequent years of assessment.
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Section 743 |
| | 20. - (1) Section 743 of the Taxes Act 1988 (provisions supplemental to section 739 etc) shall be amended as follows.
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(2) In subsection (1) (subject to an exception for income which has borne tax by deduction at the basic rate or the lower rate, income chargeable under s.739 to be charged under Case VI of Schedule D)-
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(a) for "or the lower rate" there shall be substituted ", the lower rate or the Schedule F ordinary rate"; and |
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(b) for "under Case VI of Schedule D" there shall be substituted- |
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"(a) in the case of income falling within subsection (1A) below, as if it were income to which section 1A applies by virtue of paragraph (2)(b) of that section; and |
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(b) in the case of any other income, under Case VI of Schedule D". |
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(3) After subsection (1) there shall be inserted-
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"(1A) Income falls within this subsection if it is-
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(a) income chargeable under Schedule F; |
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(b) income to which section 1A applies by virtue of its being equivalent foreign income falling within subsection (3)(b) of that section and chargeable under Case V of Schedule D; |
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(c) a distribution in relation to which section 233(1) applies; |
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(d) a qualifying distribution whose amount or value is determined in accordance with section 233(1A); |
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(e) a non-qualifying distribution, within the meaning of section 233(1B); |
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(f) income treated as arising by virtue of section 249; |
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(g) income treated as received by virtue of section 421(1)(a)." |
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(4) This paragraph has effect for the year 1999-00 and subsequent years of assessment.
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Section 819 |
| | 21. - (1) In section 819 of the Taxes Act 1988 (old references to standard rate tax) in subsection (2)-
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(a) after "(so far as applicable in accordance with section 1A) the lower rate" there shall be inserted "or the Schedule F ordinary rate"; and |
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(b) for "any higher rate" there shall be substituted "the higher rate and the Schedule F upper rate". |
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(2) This paragraph has effect for the year 1999-00 and subsequent years of assessment.
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Section 832 |
| | 22. - (1) In section 832 of the Taxes Act 1988 (interpretation of the Tax Acts) the following definitions shall be inserted in subsection (1) at the appropriate places-
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"(a) "the Schedule F ordinary rate" shall be construed in accordance with section 1B(2);"; |
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"(b) "the Schedule F trust rate" shall be construed in accordance with section 686(1A);"; |
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"(c) "the Schedule F upper rate" shall be construed in accordance with section 1B(2);". |
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(2) This paragraph has effect for the year 1999-00 and subsequent years of assessment.
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Schedule 13 |
| | 23. - (1) Schedule 13 to the Taxes Act 1988 (collection of ACT) shall be amended as follows.
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(2) In paragraph 2, in sub-paragraph (4) (calculation of amount to be paid where the franked payments for the return period exceed the franked investment income or where there is no franked investment income) for the words following "shall be calculated" there shall be substituted "in accordance with sub-paragraph (4A) below".
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(3) After that sub-paragraph there shall be inserted-
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"(4A) The tax mentioned in sub-paragraph (4) above shall be calculated-
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(a) in a case falling within paragraph (a) of that sub-paragraph, at a rate equal to nine-tenths of the rate of advance corporation tax in force for the financial year in which the return period ends on an amount equal to the excess mentioned in that paragraph; or |
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(b) in a case falling within paragraph (b) of that sub-paragraph, at the rate of advance corporation tax in force for the financial year in which the return period ends on an amount equal to the amount shown under sub-paragraph (1)(a) above." |
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(4) In paragraph 4 (receipt of franked investment income after payment of ACT) for sub-paragraph (3) (which imposes a limit on repayment) there shall be substituted-
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"(3) The amount of the repayment-
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(a) if no franked payments were made by the company in the return period for which a return is made by virtue of subsection (2) above, shall not exceed an amount equal to the advance corporation tax that would be payable in respect of a distribution equal to the difference between- |
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(i) the franked investment income received, and
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(ii) the tax credit comprised in that franked investment income; and
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(b) in any other case, shall not exceed an amount equal to the advance corporation tax that would be payable in respect of a distribution equal to the amount by which- |
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(i) the franked investment income received, exceeds
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(ii) the franked payments made in the return period,
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at the rate provided in paragraph 2(4A)(a) above." |
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(5) The preceding provisions of this paragraph have effect in relation to return periods, within the meaning of Schedule 13 to the Taxes Act 1988, ending on or after 6th April 1999.
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(6) If, in the period beginning with 1st April 1999 and ending with 5th April 1999-
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(a) any franked investment income is received by a company, or |
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(b) any franked payments are made by a company, |
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that period shall, in the case of the company, be treated for the purposes of Schedule 13 to the Taxes Act 1988 as if it were a separate return period.
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The Taxation of Chargeable Gains Act 1992 |
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Section 4 |
| | 24. - (1) Section 4 of the Taxation of Chargeable Gains Act 1992 (rates of capital gains tax) shall be amended as follows.
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(2) In subsection (2) (case where income tax is chargeable at the higher rate on part of income of an individual) after "the higher rate", where first occurring, there shall be inserted "or the Schedule F upper rate".
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(3) In subsection (3) (case where income tax is not chargeable at the higher rate on income of an individual but his gains exceed the unused basic rate band) after "the higher rate", where first occurring, there shall be inserted "or the Schedule F upper rate".
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(4) In subsection (3A) (disregard of income chargeable at the lower rate in accordance with section 1A of the Taxes Act 1988 etc)-
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(a) after "the lower rate" there shall be inserted "or the Schedule F ordinary rate"; and |
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(b) after "the higher rate" there shall be inserted "or the Schedule F upper rate". |
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(5) In subsection (3B), in paragraph (a) (determination in certain cases of the amount of income comprised in an individual's total income which is chargeable at the higher rate) after "the higher rate" there shall be inserted "or the Schedule F upper rate".
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(6) This paragraph has effect for the year of assessment 1999-00 and subsequent years of assessment.
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Section 6 |
| | 25. - (1) In section 6 of the Taxation of Chargeable Gains Act 1992 (other special cases) in subsection (3) (cases where income includes gains on policies of life insurance etc) in paragraph (b) after "as if no income were chargeable at the higher rate" there shall be inserted "or the Schedule F upper rate".
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(2) This paragraph has effect for the year of assessment 1999-00 and subsequent years of assessment.
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