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Gifts to charity from certain trusts. |
44. - (1) Chapter IA of Part XV of the Taxes Act 1988 (liability of settlors) shall not apply to any qualifying income which arises under a trust the trustees of which are resident in the United Kingdom (a "UK trust") if- |
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(a) it is given by the trustees to a charity in the year of assessment in which it arises; or |
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(b) it is income to which a charity is entitled under the terms of the trust. |
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(2) Subject to subsection (3) below, where in any year of assessment qualifying income arising under a UK trust from different sources exceeds the amount of that income falling within subsection (1) above, that amount shall be rateably apportioned between those sources. |
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(3) Nothing in subsection (2) above shall affect the operation of any requirement that the whole, or any specified part, of the income from a particular source be given to a charity. |
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(4) Where in any year of assessment qualifying income arising under a UK trust exceeds the amount of that income falling within subsection (1) above, any management expenses for that year shall be rateably apportioned between- |
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(a) so much of that income as is equal to that amount; and |
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(b) so much of that income as exceeds that amount. |
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(5) In this section- |
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"charity" has the same meaning as in section 506 of the Taxes Act 1988 and includes each of the bodies mentioned in section 507 of that Act; |
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"qualifying income" means- |
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(i) income which is to be accumulated;
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(ii) income which is payable at the discretion of the trustees or any other person (whether or not the trustees have power to accumulate it); or
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(iii) income which (before being distributed) is income of any person other than the trustees;
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"resident", in relation to the trustees of a trust, shall be construed in accordance with section 110 of the Finance Act 1989; |
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and the reference to Chapter IA of Part XV of the Taxes Act 1988 includes a reference to that Chapter as it has effect by virtue of section 660E of that Act (application to settlements by two or more settlors). |
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(6) This section has effect in relation to qualifying income arising to a UK trust on or after 6th April 2000. |
Loans to charities. |
45. - (1) In Chapter IA of Part XV of the Taxes Act 1988 "settlement" does not include any arrangement so far as it consists of a loan of money made by an individual to a charity either- |
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(a) for no consideration; or |
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(b) for a consideration which consists only of interest. |
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(2) In this section "charity" has the same meaning as in section 44 above. |
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(3) This section has effect in relation to income arising on or after 6th April 2000 on loans made before, as well as loans made on or after, that date. |
Exemption for small trades etc. |
46. - (1) Subject to subsection (2) below, exemption from tax under Case I or VI of Schedule D shall be granted, on a claim made in that behalf to the Board, in respect of any income of a charity if the requirements of subsection (3) below are satisfied with respect to the income. |
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(2) Exemption shall not be granted under subsection (1) above in respect of income which is chargeable to tax under Case VI of Schedule D by virtue of any of the following- |
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(a) section 30 of the Taxes Management Act 1970; |
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(b) sections 214, 412, 547(1)(b) and (6), 553(6), 660C, 677, 703, 776, 788, 790 and 804 of the Taxes Act 1988; |
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(c) paragraph 14 of Schedule 4 to the Finance (No. 2) Act 1997; |
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(d) paragraph 52(4) of Schedule 18, and paragraph 13(7) of Schedule 19, to the Finance Act 1998; and |
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(e) any other enactment specified in an order made by the Treasury. |
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(3) The requirements of this subsection are satisfied with respect to any income for a chargeable period if it is applied solely for the purposes of the charity and either- |
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(a) the charity's gross income for the chargeable period does not exceed the requisite limit; or |
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(b) the charity had, at the beginning of the period, a reasonable expectation that its gross income for the period would not exceed that limit. |
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(4) Subject to subsection (5) below, the requisite limit is whichever is the greater of- |
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(b) whichever is the lesser of £50,000 and 25% of all of the charity's incoming resources for the chargeable period. |
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(5) For a chargeable period of less than twelve months, the amounts of £5,000 and £50,000 specified in subsection (4) above shall be proportionally reduced. |
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(6) In this section- |
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"charity" means any body of persons or trust established for charitable purposes only; |
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"gross income", in relation to a charity, means income before deduction of any expenses; |
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"income", in relation to a charity, means any profits or gains or other income which is chargeable to tax under Case I or VI of Schedule D and which is not, apart this section, exempted from tax under that Case. |
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(7) This section applies for the year 2000-01 and subsequent years of assessment or, in the case of charities which are companies, for accounting periods beginning on or after 1st April 2000. |
| Employee share ownership |
Employee share ownership plans. |
47. Schedule 8 to this Act (employee share ownership plans) shall have effect. |
Relief for transfers to employee share ownership plans. |
48. - (1) In the Taxation of Chargeable Gains Act 1992, after section 236 insert- |
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 | "Employee share ownership plans |
Relief for transfers to employee share ownership plans |
236A. Schedule 7C (which makes provision for roll-over relief where shares are transferred to an approved employee share ownership plan) shall have effect.". |
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(2) After Schedule 7B to that Act insert the Schedule 7C set out in Schedule 9 to this Act. |
Phasing out of approved profit sharing schemes. |
49. - (1) The Board shall not approve a profit sharing scheme under Schedule 9 to the Taxes Act 1988 (approval of share option schemes and profit sharing schemes) unless the application for approval is received by the Board before 6th April 2001. |
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(2) For the purposes of subsection (1) an application for approval which is not accompanied by the particulars and evidence referred to in paragraph 1(2) of that Schedule is not regarded as received by the Board until the required particulars and evidence have been received by them. |
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(3) In section 186 of that Act (approved profit sharing schemes), in subsection (1) (under which the section applies to appropriations of shares made after 5th April 1979) after "5th April 1979" insert "and before 6th April 2002". |