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(2) (enterprise management incentives) have the meaning indicated | |
by the index. | |
(3) In this Part of this Schedule, “qualifying shares”— | |
(a) means shares acquired by the exercise of a qualifying | |
option, subject to sub-paragraphs (4) and (5), and | 5 |
(b) includes shares (“replacement shares”) which— | |
(i) are treated under section 127 (equation of original | |
shares and new holding) as the same asset as a | |
holding of qualifying shares, and | |
(ii) meet the requirements of paragraph 35 of Schedule | 10 |
5 to ITEPA 2003 (type of shares that may be | |
acquired). | |
(4) If a disqualifying event occurs in relation to a qualifying option | |
(whether the original option or a replacement option), shares | |
acquired by the exercise of that option are qualifying shares only | 15 |
if the option is exercised within 40 days of that event. | |
(5) References in this Part of this Schedule to “the original option”, | |
where there has been one or more replacement options, are to the | |
option that the replacement option (or, if there has been more than | |
one, the first of them) replaced. | 20 |
Taper relief on disposal of qualifying shares | |
15 For the purposes of computing taper relief on a disposal of | |
qualifying shares, the shares are treated as if they had been | |
acquired when the original option was granted. | |
Rights issues in respect of qualifying shares | 25 |
16 Where— | |
(a) an individual holds qualifying shares, and | |
(b) there is, by virtue of any such allotment for payment as is | |
mentioned in section 126(2)(a) (allotment in proportion to | |
shareholdings), a reorganisation affecting that holding, | 30 |
sections 127 to 130 (which relate to reorganisation or reduction of | |
share capital) shall not apply in relation to that holding.” | |
Pension Schemes Act 1993 (c. 48) | |
222 In section 181(1) of the Pension Schemes Act 1993 (general interpretation), in | |
the definition of “employee” for “emoluments chargeable to income tax | 35 |
under Schedule E” substitute “general earnings (as defined by section 7 of | |
the Income Tax (Earnings and Pensions) Act 2003)”. | |
Pension Schemes (Northern Ireland) Act 1993 (c. 49) | |
223 In section 176(1) of the Pension Schemes (Northern Ireland) Act 1993 | |
(general interpretation), in the definition of “employee” for “emoluments | 40 |
chargeable to tax under Schedule E” substitute “general earnings (as defined | |
by section 7 of the Income Tax (Earnings and Pensions) Act 2003)”. | |
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Finance Act 1994 (c. 9) | |
224 (1) In the Finance Act 1994, paragraph 27 of Schedule 24 (provisions relating to | |
the Railways Act 1993 — employee benefits: transport vouchers) is amended | |
as follows. | |
(2) In sub-paragraph (3) for “Subsection (6) of section 141 of the Taxes Act 1988” | 5 |
substitute “Section 86 of ITEPA 2003”. | |
(3) In sub-paragraph (3)(c) for “paragraphs (a) to (d) of that subsection” | |
substitute “section 86(2)(a) to (d) of ITEPA 2003”. | |
(4) In sub-paragraph (12) after the definition of “the former transport voucher | |
benefits for comparable employees” insert— | 10 |
““ITEPA 2003” means the Income Tax (Earnings and | |
Pensions) Act 2003.” | |
(5) For sub-paragraph (13) substitute— | |
“(13) Subject to paragraph 1(1) and sub-paragraph (12) | |
above, expressions used in this paragraph and in | 15 |
section 86 of ITEPA 2003 have the same meaning in | |
this paragraph as in that section. | |
This does not apply in relation to the reference to a | |
transport voucher in sub-paragraph (1) above.” | |
Finance Act 1995 (c. 4) | 20 |
225 The Finance Act 1995 is amended as follows. | |
226 (1) Amend section 128 (limit on income chargeable on non-residents: income | |
tax) as follows. | |
(2) For subsection (3)(c) substitute— | |
“(cc) it is chargeable to tax under Part 9 of ITEPA 2003 (pension | 25 |
income) because section 577 or 605 of that Act applies to it | |
(UK social security pensions and retirement annuity | |
contracts); | |
(cd) it arises from a source in the United Kingdom and is | |
chargeable to tax under Part 9 of ITEPA 2003 because section | 30 |
609, 610 or 611 of that Act applies to it (certain employment- | |
related annuities); | |
(ce) it is a taxable benefit listed in Table A in section 660 of ITEPA | |
2003, other than income support or jobseeker’s allowance, | |
chargeable to tax under Part 10 of that Act (social security | 35 |
income);” | |
(3) In subsection (3)(d) for “paragraphs (a) to (c)” substitute “paragraphs (a) to | |
(ce)”. | |
(4) For subsection (11) substitute— | |
“(11) In this section— | 40 |
“investment transaction” has the same meaning as in section | |
127 above; | |
“ITEPA 2003” means the Income Tax (Earnings and Pensions) | |
Act 2003.” | |
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227 In section 137(7) (part-time workers: miscellaneous provisions) for | |
“Subsections (2) to” substitute “Subsection”. | |
Jobseekers Act 1995 (c. 18) | |
228 The Jobseekers Act 1995 is amended as follows. | |
229 In section 15(2)(c)(i) (effect on other claimants) for “emoluments in | 5 |
pursuance of section 203 of the Income and Corporation Taxes Act 1988 | |
(PAYE)” substitute “taxable earnings (as defined by section 10 of the Income | |
Tax (Earnings and Pensions) Act 2003) under PAYE regulations”. | |
230 In section 26(3) (the back to work bonus) for the words from “Subject to | |
section 617” to “not to be taxable)” substitute “Subject to section 677 of the | 10 |
Income Tax (Earnings and Pensions) Act 2003 (which provides for a back to | |
work bonus not to be taxable)”. | |
Child Support Act 1995 (c. 34) | |
231 For section 10(4) of the Child Support Act 1995 (child maintenance bonus) | |
substitute— | 15 |
“(4) Subsection (3) is subject to section 677 of the Income Tax (Earnings | |
and Pensions) Act 2003 (which provides for a back to work bonus not | |
to be taxable).” | |
Child Support (Northern Ireland) Order 1995 (S.I. 1995/2702 (N.I. 13)) | |
232 For Article 4(4) of the Child Support (Northern Ireland) Order 1995 (child | 20 |
maintenance bonus) substitute— | |
“(4) Paragraph (3) is subject to section 677 of the Income Tax (Earnings | |
and Pensions) Act 2003 (which provides for a back to work bonus not | |
to be taxable).” | |
Jobseekers (Northern Ireland) Order 1995 (S.I. 1995/2705 (N.I. 15)) | 25 |
233 The Jobseekers (Northern Ireland) Order 1995 is amended as follows. | |
234 In Article 17(2)(c)(i) (effect on other claimants) for “emoluments in | |
pursuance of section 203 of the Income and Corporation Taxes Act 1988 | |
(PAYE)” substitute “taxable earnings (as defined by section 10 of the Income | |
Tax (Earnings and Pensions) Act 2003 under regulations made under section | 30 |
684 of that Act (PAYE regulations)”. | |
235 In Article 28(3) (the back to work bonus) for the words from “Subject to | |
section 617” to “not to be taxable)” substitute “Subject to section 677 of the | |
Income Tax (Earnings and Pensions) Act 2003 (which provides for a back to | |
work bonus not to be taxable)”. | 35 |
Teaching and Higher Education Act 1998 (c. 30) | |
236 In section 22 of the Teaching and Higher Education Act 1998 (new | |
arrangements for giving financial support to students)— | |
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(a) in subsection (5)(g) for “regulations under section 203 of the Income | |
and Corporation Taxes Act 1988 (PAYE)” substitute “PAYE | |
regulations”; and | |
(b) in subsection (6)(a) for “income assessable to income tax under | |
Schedule E” substitute “PAYE income”. | 5 |
Scotland Act 1998 (c. 46) | |
237 In section 79(3) of the Scotland Act 1998 (supplemental powers to modify | |
enactments) for “section 203 of the Income and Corporation Taxes Act 1988 | |
(PAYE)” substitute “PAYE regulations”. | |
Education (Student Support) (Northern Ireland) Order 1998 (S.I. 1998/1760 (N.I. 14)) | 10 |
238 In Article 3 of the Education (Student Support) (Northern Ireland) Order | |
1998 (new arrangements for giving financial support to students)— | |
(a) in paragraph (5)(g) for “section 203 of the Income and Corporation | |
Taxes Act 1988” substitute “section 684 of the Income Tax (Earnings | |
and Pensions) Act 2003 (PAYE regulations)”; and | 15 |
(b) in paragraph (6)(a) for “income assessable to income tax under | |
Schedule E” substitute “PAYE income (as defined in section 683 of | |
the Income Tax (Earnings and Pensions) Act 2003”. | |
Tax Credits Act 1999 (c. 10) | |
239 The Tax Credits Act 1999 is amended as follows. | 20 |
240 In section 6(1) (payment of tax credit by employers etc.) for “income | |
assessable to income tax under Schedule E” substitute “PAYE income”. | |
241 In paragraph 10(1) of Schedule 2 (transfer of functions), in paragraph (b) of | |
the subsection which, in any case where the overpayment was made in | |
respect of tax credit, is treated as substituted for— | 25 |
(a) subsection (8) of section 71 of the Social Security Administration Act | |
1992 (c. 5); and | |
(b) subsection (8) of section 69 of the Social Security Administration | |
(Northern Ireland) Act 1992 (c. 8), | |
for “section 203(2)(a) of the Income and Corporation Taxes Act 1988 (PAYE)” | 30 |
substitute “PAYE regulations”. | |
Finance Act 2000 (c. 17) | |
242 The Finance Act 2000 is amended as follows. | |
243 (1) Amend section 38 (payroll deduction scheme) as follows. | |
(2) In subsection (1)— | 35 |
(a) for “under section 202 of the Taxes Act 1988” substitute “for the | |
purposes of section 714 of the Income Tax (Earnings and Pensions) | |
Act 2003”, | |
(b) for “an employer” substitute “a person”, | |
(c) for “employee” substitute “individual”, and | 40 |
(d) for “employer”, in the second place where it occurs, substitute | |
“person”. | |
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(3) In subsection (4) for the definitions of “agent”, “employee” and “employer” | |
substitute— | |
““agent” means an agent approved for the purposes of section 714 of | |
the Income Tax (Earnings and Pensions) Act 2003;”. | |
244 (1) Amend Schedule 12 (provision of services through an intermediary) as | 5 |
follows. | |
(2) In paragraph 17— | |
(a) for “deemed Schedule E payment”, in each place, substitute “deemed | |
employment payment”; and | |
(b) after sub-paragraph (3) insert— | 10 |
“(4) In this paragraph and paragraph 18 expressions that are | |
also used in Chapter 8 of Part 2 of the Income Tax | |
(Earnings and Pensions) Act 2003 have the same meaning | |
as in that Chapter.” | |
(3) In paragraph 18— | 15 |
(a) in sub-paragraph (1) for “deemed Schedule E payment” substitute | |
“deemed employment payment”; and | |
(b) in sub-paragraph (3)(a) for “Schedule E” substitute “the employment | |
income Parts of the Income Tax (Earnings and Pensions) Act 2003”. | |
245 (1) In Schedule 20 (tax relief for expenditure of research and development), | 20 |
amend paragraph 5 as follows. | |
(2) For sub-paragraph (1)(a) substitute— | |
“(a) the earnings paid by the company to directors or | |
employees of the company;” | |
(3) After sub-paragraph (1) insert— | 25 |
“(1ZA) In sub-paragraph (1)(a) “earnings” means earnings or amounts | |
treated as earnings which constitute employment income (see | |
section 7(2)(a) or (b) of the Income Tax (Earnings and Pensions) | |
Act 2003).” | |
Capital Allowances Act 2001 (c. 2) | 30 |
246 The Capital Allowances Act 2001 is amended as follows. | |
247 (1) Amend section 4 (capital expenditure) as follows. | |
(2) For subsection (2)(b) substitute— | |
“(b) any expenditure or sum that may be allowed as a | |
deduction under a relevant provision from the taxable | 35 |
earnings from an employment or office held by the person.” | |
(3) After subsection (2) insert— | |
“(2A) In subsection (2)— | |
“relevant provision” means any of the following— | |
(a) section 262; | 40 |
(b) section 232 of ITEPA 2003 (giving effect to mileage | |
allowance relief); | |
(c) Chapters 2 to 6 of Part 5 of that Act (general | |
deductions allowed from earnings); and | |
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(d) sections 613(1), 619 and 639 of ICTA (contributions to | |
pensions funds etc.), and | |
“taxable earnings” has the meaning given by section 10 of | |
ITEPA 2003.” | |
(4) In subsection (3) for “emoluments” substitute “earnings”. | 5 |
248 (1) Amend section 20 (employments and offices) as follows. | |
(2) In subsection (2)— | |
(a) for “emoluments” substitute “earnings”; and | |
(b) for “do not fall within Case I or II of Schedule E” substitute “fall | |
within section 22 or 26 of ITEPA 2003”. | 10 |
(3) In subsection (3)— | |
(a) for “those emoluments” substitute “those earnings”; and | |
(b) for “other emoluments” substitute “other taxable earnings (as | |
defined by section 10 of ITEPA 2003)”. | |
249 In section 61(2) (disposal events and disposal values), in entry 2(b) of the | 15 |
Table, for “Schedule E” substitute “ITEPA 2003”. | |
250 In section 63(1) (cases in which disposal value is nil) for “Schedule E” | |
substitute “ITEPA 2003”. | |
251 In section 72(3) (disposal values), in entry 2(b) of the Table, for “Schedule E” | |
substitute “ITEPA 2003”. | 20 |
252 In section 88(c) (sales at under-value) for “Schedule E” substitute “ITEPA | |
2003”. | |
253 In section 262 (employments and offices)— | |
(a) in paragraph (a) for “an amount to be deducted from the | |
emoluments of” substitute “a deduction from the taxable earnings | 25 |
from”; and | |
(b) in paragraph (b) for “an emolument” substitute “earnings”. | |
254 In section 423(1) (disposal value for sections 421 and 422), in entry 2(b) of the | |
Table, for “Schedule E” substitute “ITEPA 2003”. | |
255 At the end of Part 1 of Schedule 1 (abbreviations) insert— | 30 |
| | “ITEPA 2003 | The Income Tax (Earnings and Pensions) Act 2003 (c. 00)”. | | |
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256 In Part 2 of Schedule 1 (defined expressions used in the Act), in the entry | |
relating to “United Kingdom”, after “section 830 of ICTA” insert “and section | |
41 of ITEPA 2003”. | |
Finance Act 2001 (c. 9) | 35 |
257 For section 95 of the Finance Act 2001 (exemptions in relation to employee | |
share ownership plans) substitute— | |
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