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“(1A) This subsection applies to— | |
(a) the charge under Schedule D, | |
(b) the charge under Part 9 of ITEPA 2003 (pension income) in | |
respect of— | |
(i) income to which section 573, 605, 609, 610, 611, 623 or | 5 |
629 of that Act applies, | |
(ii) any annual payment to which section 633 of that Act | |
applies which is made by or on behalf of a person who | |
is outside the United Kingdom, or | |
(iii) income to which section 583 of that Act applies if the | 10 |
paying scheme (see subsection (3) of that section) is a | |
pilots’ benefit fund (see section 587 of that Act), and | |
(c) the charge under Part 10 of ITEPA 2003 (social security | |
income) in respect of benefits to which section 678 of that Act | |
applies (foreign benefits).” | 15 |
49 In section 347A(5) (annual payments: general rule) for “, 68(1)(b) or 192(3)” | |
substitute “or 68(1)(b) of this Act or section 355 of ITEPA 2003 (deductions | |
for certain payments by non-domiciled employees with foreign | |
employers)”. | |
50 (1) Amend section 348 (payments out of profits or gains brought into charge to | 20 |
income tax: deduction of tax) as follows. | |
(2) In subsection (1) for “charged with tax under Case III of Schedule D, not | |
being interest,” substitute “to which this subsection applies”. | |
(3) After subsection (1) insert— | |
“(1A) Subsection (1) applies to any annuity or other annual payment, not | 25 |
being interest— | |
(a) which is charged with tax under Case III of Schedule D, | |
(b) which is charged with tax under Part 9 of ITEPA 2003 | |
(pension income) because section 605 of that Act applies to it | |
(retirement annuity contracts: annuities), or | 30 |
(c) which arises from a source in the United Kingdom and is | |
charged with tax under Part 9 of ITEPA 2003 because section | |
609, 610 or 611 of that Act applies to it (certain employment- | |
related annuities).” | |
51 (1) Amend section 349 (payments not out of profits or gains brought into charge | 35 |
to income tax, and annual interest) as follows. | |
(2) In subsection (1)(a) for “charged with tax under Case III of Schedule D, not | |
being interest” substitute “to which this paragraph applies”. | |
(3) After the first sentence of subsection (1) insert— | |
“(1A) Paragraph (a) of subsection (1) applies to any annuity or other | 40 |
annual payment, not being interest— | |
(a) which is charged with tax under Case III of Schedule D, | |
(b) which is charged with tax under Part 9 of ITEPA 2003 | |
(pension income) because section 605 of that Act applies to it, | |
or | 45 |
(c) which arises from a source in the United Kingdom and is | |
charged with tax under Part 9 of ITEPA 2003 because section | |
609, 610 or 611 of that Act applies to it.” | |
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| |
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| |
(4) Number the second sentence of subsection (1) as subsection (1B). | |
(5) In the new subsection (1B) for “This subsection” substitute “Subsection (1)”. | |
52 In section 376(2) (qualifying borrowers and qualifying lenders) for the | |
words from “an office or employment” to “Schedule E” substitute “an office | |
or employment which would, but for some special exemption or immunity | 5 |
from tax, be a taxable employment under Part 2 of ITEPA 2003 (as defined | |
by section 66(3) of that Act)”. | |
53 In section 391(2) (losses from trade etc. carried on abroad) for “, 192(2), (3) or | |
(4) or 196” substitute “of this Act or section 23, 355 or 615 of ITEPA 2003”. | |
54 (1) Amend section 392 (Case VI losses) as follows. | 10 |
(2) For subsection (1)(a) and (b) substitute— | |
“(a) that the amount of the loss sustained by him shall, as far as | |
may be, be deducted from or set off against the total of— | |
(i) the amount of any profits or gains arising from any | |
transaction in respect of which he is assessed for that | 15 |
year under that Case, and | |
(ii) the amount of any qualifying income on which tax is | |
charged under Part 9 of ITEPA 2003 (pension income) | |
for that year, and | |
(b) that any portion of the loss for which relief is not so given | 20 |
shall, as far may be, be carried forward and deducted from or | |
set off against the total of— | |
(i) the amount of any profits or gains arising from any | |
transaction in respect of which he is assessed under | |
that Case for any subsequent year of assessment, and | 25 |
(ii) the amount of any qualifying income on which tax is | |
charged under Part 9 of ITEPA 2003 for the | |
subsequent year of assessment.” | |
(3) For subsection (3) substitute— | |
“(3) Any relief under this section by way of the carrying forward of the | 30 |
loss shall be given as far as possible from the first subsequent | |
assessment in respect of— | |
(a) any profits or gains arising from any transaction in respect of | |
which he is assessed under Case VI of Schedule D for any | |
year, or | 35 |
(b) any qualifying income on which tax is charged under Part 9 | |
of ITEPA 2003 for any year, and | |
so far as it cannot be so given, then from the next such assessment, | |
and so on.” | |
(4) After subsection (5) insert— | 40 |
“(6) For the purposes of subsection (1)(a)(ii) and (b)(ii) and subsection | |
(3)(b) income is “qualifying income” if— | |
(a) section 583 of ITEPA 2003 applies to it and the paying scheme | |
(see subsection (3) of that section) is a pilots’ benefit fund (see | |
section 587 of ITEPA 2003), or | 45 |
(b) section 623 of ITEPA 2003 applies to it.” | |
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55 (1) Amend section 418 (“distribution” to include certain expenses of close | |
companies) as follows. | |
(2) In subsection (3)(a)— | |
(a) for “to which Chapter II of Part V applies” substitute “to which Part | |
3 of ITEPA 2003 applies (earnings and benefits etc. treated as | 5 |
employment income) without the exclusion in section 216 of that Act | |
(provisions not applicable to lower-paid employment)”; and | |
(b) for “sections 154 to 165” substitute “Chapters 6 to 10 of Part 3 and | |
section 223 of that Act (cars and vans, loans, shares, other benefits, | |
and payments on account of director’s tax)”. | 10 |
(3) In subsection (3)(b) for “section 145” substitute “Chapter 5 of Part 3 of ITEPA | |
2003”. | |
(4) In subsection (4) for “Chapter II of Part V” substitute “Chapters 6 to 10 of | |
Part 3 of ITEPA 2003”. | |
56 In section 545(1)(a) (capital redemption policies) after “Schedule D” insert | 15 |
“or under Part 9 of ITEPA 2003 (pension income) because section 609, 610 or | |
611 applies to them (certain employment-related annuities)”. | |
57 In section 550(7) (relief where gain charged at a higher rate) for “, 36 or 148” | |
substitute “or 36 of this Act or any amount which counts as employment | |
income under section 403 of ITEPA 2003 (payments and benefits on | 20 |
termination of employment etc.)”. | |
58 In section 559(1A) (sub-contractors in the construction industry) for | |
“chargeable to income tax under Schedule E by virtue of section 134(1)” | |
substitute “treated as earnings from an employment by virtue of Chapter 7 | |
of Part 2 of ITEPA 2003 (agency workers)”. | 25 |
59 In section 561(6) (exceptions from section 559), for “the same meaning as in | |
Chapter II of Part V” substitute “the meaning given by section 67 of ITEPA | |
2003”. | |
60 In section 565(2C)(a) (conditions to be satisfied by companies), for “the | |
meaning of Chapter II of Part V” substitute “the meaning given by section 67 | 30 |
of ITEPA 2003”. | |
61 In section 566(1) (general powers to make regulations under Chapter IV) for | |
“regulations may be made under section 203” substitute “PAYE regulations | |
may be made”. | |
62 (1) Section 577 (business entertaining expenses) is amended as follows. | 35 |
(2) Omit subsection (1)(b) and the word “and” preceding it. | |
(3) In subsection (3) omit the words from “but where—” to the end of the | |
subsection. | |
63 Omit section 579(1) (statutory redundancy payments). | |
64 Omit section 580(3) (provisions supplementary to section 579(1)). | 40 |
65 In section 580A(7)(b) (relief from tax on annual payments under certain | |
insurance policies) for “Schedule E” substitute “Parts 3 to 7 (employment | |
income) or Part 9 (pension income) of ITEPA 2003”. | |
66 (1) Amend section 585 (relief from tax on delayed remittances) as follows. | |
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| |
(2) In subsection (1) omit the words “, or under Case III of Schedule E,”. | |
(3) Omit subsection (9)(b) and the word “and” preceding it. | |
67 (1) Amend section 588 (training courses for employees) as follows. | |
(2) For subsections (1) and (2) substitute— | |
“(1) This section applies where a person (“the employer”) incurs | 5 |
retraining course expenses within the meaning of section 311 of | |
ITEPA 2003 (exemptions: retraining courses).” | |
(3) For paragraphs (a) and (b) of subsection (3) substitute— | |
“(a) an employer incurs expenditure in paying or reimbursing | |
retraining course expenses as mentioned in subsection (1) | 10 |
above; and | |
(b) by virtue of section 311 of ITEPA 2003, no liability to income | |
tax arises in respect of the payment or reimbursement,”. | |
(4) Omit subsection (5)(a). | |
(5) In subsection (5)(b) for the words from “such a failure” to the end of the | 15 |
paragraph substitute “a failure to meet a condition of the kind mentioned in | |
section 312(1)(b)(i) or (ii) of ITEPA 2003”. | |
(6) In subsection (6) for “comply with any provision of section 589(3) and (4)” | |
substitute “meet a condition in section 312(1)(b)(i) or (ii) of ITEPA 2003”. | |
68 Omit section 589 (qualifying courses of training etc.). | 20 |
69 (1) Section 589A (counselling services for employees) is amended as follows. | |
(2) For subsection (1) substitute— | |
“(1) This section applies where expenditure (“relevant expenditure”)— | |
(a) is incurred in the provision of services to a person (“the | |
employee”) in connection with the cessation of the person’s | 25 |
office or employment, or | |
(b) is incurred in the payment or reimbursement of— | |
(i) fees for such provision, or | |
(ii) travelling expenses incurred in connection with such | |
provision, | 30 |
and (in either case) the relevant conditions are met. | |
(1A) In subsection (1) above “the relevant conditions” means— | |
(a) conditions A to D for the purposes of section 310 of ITEPA | |
2003 (exemptions: counselling and other outplacement | |
services), and | 35 |
(b) in the case of travel expenses, condition E for those | |
purposes.” | |
(3) Omit— | |
(a) subsections (2) to (6), and | |
(b) subsection (10). | 40 |
70 (1) Section 589B (qualifying counselling services etc.) is amended as follows. | |
(2) Omit subsections (1) to (4A). | |
(3) In subsection (5) omit “this section or”. | |
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71 In section 591D (provisions supplementary to section 591C) omit subsection | |
(6). | |
72 For section 592(7) (exempt approved schemes) substitute— | |
“(7) Any contribution paid under the scheme shall be allowed to be | |
deducted from employment income for the year of assessment in | 5 |
which the contribution is paid. | |
A deduction under this subsection may only be made once in respect | |
of the same contribution. | |
73 In section 594(1) (exempt statutory schemes)— | |
(a) for the words “shall, in assessing tax under Schedule E, be allowed to | 10 |
be deducted as an expense incurred in” substitute “shall be allowed | |
to be deducted from employment income for”; | |
(b) at the end insert— | |
“A deduction under this section may only be made once in | |
respect of the same contribution.” | 15 |
74 Omit sections 595 and 596 (payments by employer to retirement benefits | |
scheme). | |
75 Omit sections 596A to 596C (benefits under non-approved retirement | |
benefits schemes). | |
76 Omit section 597 (charge to tax: pensions). | 20 |
77 In section 599A (charge to tax: payments out of surplus funds) omit | |
subsections (5), (6) and (8). | |
78 Omit section 600 (charge to tax: unauthorised payments to or for | |
employees). | |
79 (1) Amend section 606 (default of administrator of retirement benefit scheme) | 25 |
as follows. | |
(2) In subsection (9) after “this Chapter” insert “or Chapter 2 of Part 6 of ITEPA | |
2003 (benefits from non-approved pension schemes)”. | |
(3) In subsection (11)(b) after “this Chapter” insert “or Chapter 2 of Part 6 of | |
ITEPA 2003 (benefits from non-approved pension schemes)”. | 30 |
80 (1) Amend section 607 (marine pilots: pilots’ benefit fund) as follows. | |
(2) In subsection (2)(a) for “597 to 600” substitute “598 to 599A”. | |
(3) In subsection (2)(b) for “under section 600” substitute “in accordance with | |
section 584 of ITEPA 2003 (unauthorised payments)”. | |
(4) For subsection (3)(a) substitute— | 35 |
“(a) in section 592— | |
(i) subsections (4) to (6) shall be omitted; and | |
(ii) for subsection (7) there shall be substituted— | |
“(7) Any contribution paid under the scheme by a member | |
of the fund shall, in assessing tax under Schedule D, be | 40 |
allowed to be deducted as an expense.”;”. | |
(5) In subsection (3)(b) for “sections 597 to 606 (except sections 601 to 603)” | |
substitute “sections 598 to 599A and sections 604 to 606”. | |
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(6) Omit subsection (3)(b)(iv) and the word “and” preceding it. | |
81 In section 608 (charge to tax on annuities paid out of superannuation funds | |
approved before 6 April 1980) omit subsection (4). | |
82 In section 612(1) (interpretation etc. of Chapter) in the definition of | |
“remuneration”— | 5 |
(a) in paragraph (a) for “in respect of which tax is chargeable under | |
Schedule E and which” substitute “which is chargeable to tax as | |
employment income and”; and | |
(b) in paragraph (b) for “section 148” substitute “Chapter 3 of Part 6 of | |
ITEPA 2003 (payments and benefits on termination of employment | 10 |
etc.)”. | |
83 In section 613 (Parliamentary pension funds) omit subsections (1) to (3). | |
84 In section 614(3) (exemptions and reliefs in respect of income tax from | |
investments etc. of certain pension schemes) for “paragraph (b), (c), (d) or (f) | |
of subsection (2) of section 615” substitute “section 648, 649, 650 or 651 of | 15 |
ITEPA 2003” | |
85 In section 615 (exemption from tax in respect of certain pensions) omit | |
subsections (1), (2), (4), (5) and (8). | |
86 Omit subsection 616 (other overseas pensions). | |
87 (1) Amend section 617 (social security benefits and contributions) as follows. | 20 |
(2) Omit subsections (1) and (2). | |
(3) For subsection (4)(d) and (e) substitute— | |
“(d) as a deduction under section 336 of ITEPA 2003 (deductions | |
for expenses) from the taxable earnings from an office or | |
employment; or | 25 |
(e) as a deduction under section 332(3)(a) from the profits or fees | |
of the profession or vocation of a minister of religion, or a | |
deduction under section 351(1) of ITEPA 2003 from the | |
taxable earnings from an employment as such a minister.”. | |
88 Omit section 617A (tax credits under Part 1 of Tax Credits Act 2002). | 30 |
89 In section 624(2) (sponsored superannuation schemes and controlling | |
directors) for “Case I of Schedule E in respect of his emoluments” substitute | |
“section 15 of ITEPA 2003 in respect of his general earnings”. | |
90 (1) Amend section 638 (other restrictions on approval of a personal pension | |
scheme) as follows. | 35 |
(2) In subsection (7) for “emoluments” substitute “general earnings”. | |
(3) In subsection (11)— | |
(a) for “a savings-related share option scheme” substitute “an SAYE | |
option scheme”, and | |
(b) for “an employee share ownership plan” substitute “a share | 40 |
incentive plan”. | |
(4) In subsection (12)— | |
(a) in paragraph (a), for “a savings-related share option scheme” | |
substitute “an SAYE option scheme”, and | |
(b) in paragraph (b)— | 45 |
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| |
(i) for “an employee share ownership plan” substitute “a share | |
incentive plan”, and | |
(ii) for “employee share ownership plan”, in the second place in | |
which it appears, substitute “share incentive plan”. | |
(5) In subsection (13)— | 5 |
(a) omit the definition of “employee share ownership plan”, and | |
(b) for the definition of “savings-related share option scheme” | |
substitute— | |
““SAYE option scheme” has the same meaning as in the | |
SAYE code (see section 516 of ITEPA 2003 (approved | 10 |
SAYE option schemes)), and | |
“share incentive plan” has the same meaning as in the | |
SIP code (see section 488 of that Act (approved share | |
incentive plans)).” | |
91 (1) Section 643 (employer’s contributions and personal pension income etc.) is | 15 |
amended as follows. | |
(2) Omit subsection (1). | |
(3) In subsection (5) omit “shall be assessable to tax under Schedule E (and | |
section 203 shall apply accordingly) and”. | |
92 (1) Amend section 644 (meaning of “relevant earnings”) as follows. | 20 |
(2) In subsection (2)(a) for “emoluments chargeable under Schedule E” | |
substitute “general earnings”. | |
(3) In subsection (2)(b) for “emoluments of” substitute “earnings from”. | |
(4) In subsection (3) for “emoluments”, in both places where it occurs, substitute | |
“general earnings”. | 25 |
(5) In subsection (4)(a) for “Schedule E” substitute “ITEPA 2003”. | |
(6) In subsection (4)(b) for “section 148” substitute “Chapter 3 of Part 6 of ITEPA | |
2003 (payments and benefits on termination of employment etc.)”. | |
(7) In each of the following provisions for “emoluments” substitute “general | |
earnings”— | 30 |
(a) subsection (5); | |
(b) subsection (6A); | |
(c) subsection (6D)(c); | |
(d) subsection (6E)(d). | |
93 (1) Amend section 645 (earnings from pensionable employment) as follows. | 35 |
(2) In subsection (3)(c) for “section 596(1)(a), (b) or (c)” substitute “section 387(2) | |
of ITEPA 2003 (meaning of non-approved retirement benefits scheme)”. | |
(3) In subsection (4A)— | |
(a) for “emoluments” substitute “earnings”; | |
(b) for “foreign emoluments within the meaning of section 192” | 40 |
substitute “earnings and amounts treated as earnings to which | |
subsection (4B) applies”; | |
(c) for “section 596(1)(a), (b) or (c)” substitute “section 387(2) of ITEPA | |
2003 (meaning of non-approved retirement benefits scheme)”. | |
(4) After subsection (4A) insert— | 45 |
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