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| Phasing out of vocational training relief. |
54. - (1) For subsection (2) of section 32 of the Finance Act 1991 (vocational training relief) there shall be substituted-
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"(2) The individual shall be entitled to relief under this subsection in respect of the payment for the year of assessment in which it is made; but relief under this subsection shall be given only on a claim made for the purpose, except where subsections (3) to (5) below apply.
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(2A) Where an individual is entitled to relief under subsection (2) above in respect of any payment made in a year of assessment, the amount of his liability for that year to income tax on his total income shall be the amount to which he would be liable apart from this section less whichever is the smaller of-
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(a) the amount which is equal to such percentage of the amount of the payment as is the basic rate for the year; and |
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(b) the amount which reduces his liability to nil. |
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(2B) In determining for the purposes of subsection (2A) above the amount of income tax to which a person would be liable apart from this section, no account shall be taken of-
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(a) any income tax reduction under Chapter I of Part VII of the Taxes Act 1988 or under section 347B of that Act; |
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(b) any income tax reduction under section 353(1A) of the Taxes Act 1988; |
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(c) any relief by way of a reduction of liability to tax which is given in accordance with any arrangements having effect by virtue of section 788 of the Taxes Act 1988 or by way of a credit under section 790(1) of that Act; |
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(d) any tax at the basic rate on so much of that person's income as is income the income tax on which he is entitled to charge against any other person or to deduct, retain or satisfy out of any payment." |
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(2) That section and section 33 of that Act (provisions supplementary to section 32) shall cease to have effect.
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(3) In this section-
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(a) subsection (1) has effect in relation to payments made on or after 6th April 1999; and |
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(b) subsection (2) shall have effect in relation to payments made on or after such date after 6th April 2000 as the Treasury may by order appoint. |
| Student loans: certain interest to be disregarded. |
55. The following section shall be inserted after section 331 of the Taxes Act 1988-
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| "Student loans: certain interest to be disregarded. |
331A. - (1) If-
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(a) a loan is made to a person under any of the relevant student loan provisions, |
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(b) an amount is recovered from him in respect of the loan, |
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(c) an amount is repaid to him in respect of the amount recovered, and |
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(d) interest is paid to him in respect of the amount repaid, |
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the interest shall be disregarded for all purposes of income tax.
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(2) For the purposes of subsection (1) above the relevant student loan provisions are-
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(a) section 22 of the Teaching and Higher Education Act 1998; |
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(b) section 73(f) of the Education (Scotland) Act 1980; |
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(c) Article 3 of the Education (Student Support) (Northern Ireland) Order 1998." |
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Various other reliefs |
| Class 1B National Insurance contributions. |
56. - (1) In section 617 of the Taxes Act 1988 (social security benefits and contributions), in subsection (4), for "or Class 1A contribution" there shall be substituted ", a Class 1A contribution or a Class 1B contribution".
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(2) Subsection (1) above has effect in relation to contributions paid on or after 6th April 1999.
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| Expenditure on film production and acquisition. |
57. In subsection (2)(a) of section 48 of the Finance (No. 2) Act 1997 (which provides for favourable tax treatment for certain expenditure on film production and acquisition incurred on or after 2nd July 1997 and before 2nd July 2000), for "2nd July 2000" there shall be substituted "2nd July 2002".
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Settlements |
| Income of unmarried child of settlor. |
58. - (1) In section 660B(1) of the Taxes Act 1988 (circumstances in which income arising under settlement treated as that of settlor), before "is paid to or for the benefit of an unmarried minor child of the settlor" insert "(a)" and after those words insert-
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" , or
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(b) would otherwise be treated (apart from this section) as income of an unmarried minor child of the settlor,". |
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(2) In subsection (3) of that section (meaning of available retained or accumulated income), for paragraphs (a) and (b) substitute-
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"(a) treated as income of the settlor, or |
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(b) paid (whether as income or capital) to or for the benefit of, or otherwise treated as the income of, a beneficiary other than an unmarried minor child of the settlor, or |
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(bb) treated as the income of an unmarried minor child of the settlor, and subject to tax, in any of the years 1995-96, 1996-97 or 1997-98, or". |
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(3) After that subsection insert-
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"(3A) For the purposes of subsection (3)(bb) above-
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(a) the amount of a child's income that is subject to tax in a year of assessment is the amount ("the taxable amount") by which the child's total income for income tax purposes exceeds the aggregate amount of allowances that may be set against it; and |
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(b) income arising under the settlement that is treated as income of the child is subject to tax to the extent that it does not exceed the taxable amount. |
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In this subsection "allowance" includes any deduction allowed against total income.".
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(4) For subsection (5) of that section substitute-
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"(5) If in any year of assessment the aggregate amount of a child's relevant settlement income does not exceed £100, subsection (1) does not apply in relation to that income.
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A child's `relevant settlement income' means income paid to or for the benefit of, or otherwise treated as income of, that child which apart from this subsection would be treated as income of the settlor under subsection (1).".
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(5) The amendment in subsection (1) above has effect in relation to-
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(a) income arising under a settlement made or entered into on or after 9th March 1999, and |
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(b) income arising under a settlement made or entered into before that date so far as it arises directly or indirectly from funds provided on or after that date; |
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and the amendment in subsection (4) above has effect accordingly.
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Any apportionment required for the purposes of paragraph (b) shall be made on a just and reasonable basis.
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(6) The amendments in subsections (2) and (3) above have effect in relation to any payment within subsection (2) of section 660B of the Taxes Act 1988 made on or after 9th March 1999.
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In relation to such a payment those amendments apply whenever the facts mentioned in subsection (3) of that section occurred.
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(7) In section 660E of the Taxes Act 1988 (application of provisions to settlements by two or more settlors), in subsection (3) (which refers to section 660B) for the words from "in relation to" to "child of the settlor" substitute "in relation to a child of the settlor".
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