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21 Omit sections 145 to 147 (living accommodation) | |
22 Omit sections 148 to 151A (payments on retirement, sick pay and certain | |
social security benefits). | |
23 For the sidenote to section 152 (notification of amount taxable under section | |
151) substitute “Notification of taxable amount of certain benefits”. | 5 |
24 Omit sections 153 to 159AC and sections 160 to 168G (employees earning | |
£8,500 or more and directors: expenses and benefits in kind). | |
25 Omit section 185 (approved share option schemes). | |
26 (1) Amend section 186 (approved profit sharing schemes) as follows. | |
(2) In subsection (3)— | 10 |
(a) omit “the participant shall be chargeable to income tax under | |
Schedule E for the year of assessment in which the entitlement arises | |
on”, and | |
(b) at the end add “counts as employment income of the participant for | |
the year of assessment in which the entitlement arises”. | 15 |
(3) In subsection (4)— | |
(a) omit “the participant shall be chargeable to income tax under | |
Schedule E for the year of assessment in which the disposal takes | |
place on”, and | |
(b) at the end add “counts as employment income of the participant for | 20 |
the year of assessment in which the disposal takes place”. | |
(4) In subsection (5)(a), for the words from “chargeable to income tax” to “those | |
shares” substitute “entitled to a capital receipt (within the meaning of | |
subsection (3) above) which is referable to those shares and— | |
(i) an amount calculated by reference to that capital | 25 |
receipt counts as his employment income by virtue of | |
subsection (3) above, or | |
(ii) if the entitlement to the capital receipt arose before | |
6th April 2003, he was chargeable to income tax by | |
virtue of that subsection (as it had effect before that | 30 |
date) in respect of that capital receipt,”. | |
27 In section 187 (interpretation of sections 185 and 186 and Schedules 9 and 10) | |
omit subsections (1) to (4), (6) and (7), except so far as relating to profit | |
sharing schemes. | |
28 Omit the following provisions (which give relief from income tax on various | 35 |
kinds of income)— | |
(a) section 187A; | |
(b) sections 189 to 198; | |
(c) sections 199 to 202. | |
29 Omit sections 202A and 202B (assessment on receipts basis). | 40 |
30 Omit sections 203 to 204 (pay as you earn). | |
31 Omit sections 205 and 206 (assessments). | |
32 Omit section 206A (PAYE settlement agreements). | |
33 Omit section 207 (disputes as to domicile or ordinary residence). | |
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34 After section 251 insert— | |
“Approved share incentive plans | |
251A Application of sections 251B and 251C | |
(1) Sections 251B and 251C apply for income tax purposes in connection | |
with shares awarded under an approved share incentive plan. | 5 |
(2) But those sections do not apply to an individual if, at the time of the | |
award of shares in question— | |
(a) the earnings from the eligible employment are not (or would | |
not be if there were any) general earnings to which any of the | |
charging provisions of Chapter 4 or 5 of Part 2 of ITEPA 2003 | 10 |
apply, or | |
(b) in the case of an award made before 6th April 2003, he was | |
not chargeable to tax under Schedule E in respect of the | |
employment by reference to which he met the requirement of | |
paragraph 14 of Schedule 8 to the Finance Act 2000 | 15 |
(employee share ownership plans: the employment | |
requirement) in relation to the plan. | |
(3) For the purposes of subsection (2)— | |
(a) “the eligible employment” means the employment which | |
results in the individual meeting the employment | 20 |
requirement in relation to the plan, and | |
(b) the reference to any of the charging provisions of Chapter 4 | |
or 5 of Part 2 of ITEPA 2003 has the same meaning as it has in | |
the employment income Parts of that Act (see sections 14(3) | |
and 20(3) of that Act). | 25 |
251B Treatment of cash dividend retained and then later paid out | |
(1) Where a cash dividend is paid over to a participant under paragraph | |
68(4) of Schedule 2 to ITEPA 2003 (cash dividend paid over if not | |
reinvested), the participant is chargeable to tax on the appropriate | |
amount under Schedule F for the year of assessment in which the | 30 |
dividend is paid over. | |
(2) In subsection (1), the “appropriate amount” means the amount of the | |
dividend paid over (except to the extent that it represents a foreign | |
cash dividend). | |
(3) For the purposes of determining the tax credit (if any) to which the | 35 |
participant is entitled under section 231, the reference in subsection | |
(1) of that section to the tax credit fraction in force when the | |
distribution is made shall be read as a reference to the fraction in | |
force when the dividend is paid over to the participant. | |
251C Charge on dividend shares ceasing to be subject to plan | 40 |
(1) If dividend shares cease to be subject to the plan before the end of the | |
period of three years beginning with the date on which the shares | |
were acquired on the participant’s behalf, the participant is | |
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(1) chargeable to tax on the appropriate amount under Schedule F for | |
the year of assessment in which the shares cease to be subject to the | |
plan. | |
(2) In subsection (1) “the appropriate amount” means the amount of the | |
cash dividend applied to acquire the shares on the participant’s | 5 |
behalf (except to the extent that it represents a foreign cash | |
dividend). | |
(3) For the purposes of determining the tax credit (if any) to which the | |
participant is entitled under section 231, the reference in subsection | |
(1) of that section to the tax credit fraction in force when the | 10 |
distribution is made shall be read as a reference to the fraction in | |
force when the shares cease to be subject to the plan. | |
(4) Where the participant is charged to tax under this section the tax due | |
shall be reduced by the amount or aggregate amount of any tax paid | |
on any capital receipts under section 501 of ITEPA 2003 in respect of | 15 |
those shares. | |
(5) In subsection (4) “the tax due” means the amount of tax due after | |
deduction of the tax credit determined under subsection (3). | |
(6) This section has effect subject to section 498 of ITEPA 2003 (no charge | |
on shares ceasing to be subject to plan in certain circumstances). | 20 |
251D Interpretation of sections 251A to 251C | |
(1) Sections 251A to 251C and this section form part of the SIP code (see | |
section 488 of ITEPA 2003 (approved share incentive plans)). | |
(2) Accordingly, expressions used in those sections and contained in the | |
index at the end of Schedule 2 to that Act (approved share incentive | 25 |
plans) have the meaning indicated by that index. | |
(3) In sections 251B and 251C “foreign cash dividend” means a cash | |
dividend paid in respect of plan shares in a company not resident in | |
the United Kingdom.” | |
35 In section 257C(2A) (indexation of amounts in sections 257 and 257A) for | 30 |
“section 203” substitute “PAYE regulations”. | |
36 After section 266 insert— | |
“266A Life assurance premiums paid by employer | |
(1) This section applies if— | |
(a) pursuant to a non-approved retirement benefits scheme, the | 35 |
employer in any year of assessment pays a sum with a view | |
to the provision of any relevant benefits for or in respect of | |
any employee of that employer, and | |
(b) the payment is made under such an insurance or contract as | |
is mentioned in section 266. | 40 |
This section applies whether or not the accrual of the relevant | |
benefits is dependent on any contingency. | |
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(2) Relief, if not otherwise allowable, shall be given to that employee | |
under section 266 in respect of the payment to the extent, if any, to | |
which such relief would have been allowable to him if— | |
(a) the payment had been made by him, and | |
(b) the insurance or contract under which the payment is made | 5 |
had been made with him. | |
(3) For the purposes of subsection (1)(a)— | |
(a) a retirement benefits scheme is “non-approved” unless it is— | |
(i) an approved scheme, | |
(ii) a relevant statutory scheme, or | 10 |
(iii) a scheme set up by a government outside the United | |
Kingdom for the benefit of its employees or primarily | |
for their benefit, and | |
(b) benefits are provided in respect of an employee if they are | |
provided for the employee’s spouse, widow or widower, | 15 |
children, dependants or personal representatives. | |
(4) Sections 611, 611A and 612 apply for the purposes of this section as | |
they apply for the purposes of Chapter 1 of Part 14. | |
(5) Section 388 of ITEPA 2003 (apportionment of payments in respect of | |
more than one employee) applies in relation to a sum within | 20 |
subsection (1) as it applies in relation to a sum within section 386 of | |
that Act (charge on payments to non-approved retirement benefits | |
schemes). | |
(6) This section does not apply in any case where either of the following | |
provisions of ITEPA 2003 provides for section 386 of that Act not to | 25 |
apply— | |
(a) section 389 (employments where earnings charged on | |
remittance basis), and | |
(b) section 390 (non-domiciled employees with foreign | |
employers).” | 30 |
37 In section 306(7) (claims) for “regulations made under section 203” substitute | |
“PAYE regulations”. | |
38 In section 307(6)(a)(i) (withdrawal of relief) for “regulations under section | |
203” substitute “PAYE regulations”. | |
39 Omit section 313 (taxation of consideration for certain restrictive | 35 |
undertakings). | |
40 In section 314(1) (divers and diving supervisors) for the words from “and | |
accordingly” to the end of the subsection substitute “and accordingly any | |
employment income taken into account in computing the profits or gains of | |
that trade is not chargeable under Part 2 of ITEPA 2003.” | 40 |
41 Omit sections 315 to 318 (pensions etc. paid in respect of military or war | |
service etc.). | |
42 Omit section 319 (crown servants: foreign service allowance). | |
43 Omit section 321 (consuls and other official agents). | |
44 (1) Amend section 322 (consular officers and employees) as follows. | 45 |
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(2) In subsection (1) for “any income of his falling within Case IV or V of | |
Schedule D” substitute “any qualifying income of the consular officer or | |
employee”. | |
(3) After subsection (1) insert— | |
“(1A) In subsection (1) “qualifying income” means— | 5 |
(a) income falling within Case IV or V of Schedule D, | |
(b) income to which section 573 or 629 of ITEPA 2003 applies | |
(foreign pensions and pre-1973 pensions paid under the | |
Overseas Pensions Act 1973), | |
(c) income arising from a source outside the United Kingdom to | 10 |
which section 609, 610, 611 or 633 of ITEPA 2003 applies | |
(certain employment-related annuities and voluntary annual | |
payments), and | |
(d) a benefit to which section 678 of ITEPA applies (foreign | |
benefits).” | 15 |
(4) Omit subsection (2). | |
45 (1) Amend section 323 (visiting forces) as follows. | |
(2) Omit subsection (1). | |
(3) In subsection (2) for “subsection (1) above” substitute “section 303(1) of | |
ITEPA 2003 (exemption for earnings of visiting forces etc.)”. | 20 |
(4) In subsection (4)— | |
(a) for “subsections (1) and (2)” substitute “subsection (2)”; | |
(b) for “those subsections” substitute “that subsection”; | |
(c) before “the Visiting Forces Act 1952” insert “Part 1 of”. | |
(5) In subsection (5) for “subsections (1) and (2)” substitute “subsection (2)”. | 25 |
(6) Omit subsection (6)(b) and the word “and” preceding it. | |
(7) Omit subsection (7). | |
46 Omit section 330 (compensation for National-Socialist persecution). | |
47 (1) Amend section 332 (expenditure and houses of ministers of religion) as | |
follows. | 30 |
(2) Omit subsections (1) and (2). | |
(3) In subsection (3)— | |
(a) for “(whether under Schedule E or any other Schedule)” substitute | |
“under Schedule D”, | |
(b) for “profits, fees or emoluments” substitute “profits or fees”, and | 35 |
(c) in paragraph (c), for the words from “in right of” to “that subsection” | |
substitute “an interest belongs to a charity or ecclesiastical | |
corporation and, in right of that interest, in which he has a residence | |
from which to perform his duties as a clergyman or minister”. | |
(4) Omit subsections (3A), (3B) and (4). | 40 |
48 (1) Amend section 336 (temporary residents in the United Kingdom) as follows. | |
(2) In subsection (1) for “Schedule D” substitute “a charge to which subsection | |
(1A) applies”. | |
(3) After subsection (1) insert— | |
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