|
| |
|
(a) | an individual carries on a trade of farming or market gardening in |
| |
the United Kingdom in partnership, and |
| |
(b) | but for the repeal by this Act of section 96 of ICTA the individual |
| |
could have made a claim under that section in relation to the profits |
| |
of that trade for the tax years 2004-05 and 2005-06, |
| 5 |
| the individual may make an averaging claim under section 222 of this Act in |
| |
relation to those profits for those tax years (despite anything in Chapter 16 |
| |
of Part 2 of this Act to the contrary). |
| |
Adjustment on change of basis |
| |
56 (1) | Chapter 17 of Part 2 applies to a change of basis taking effect for a period of |
| 10 |
account which ends on or after 6th April 2005. |
| |
(2) | For this purpose the period of account for which a change of basis takes |
| |
effect is the first period of account for which the new basis is adopted. |
| |
57 (1) | Subject to sub-paragraph (3), section 232 applies before 6th April 2006 with |
| |
| 15 |
| |
(a) | before paragraph (a) insert— |
| |
“(aa) | relevant earnings within section 623(2)(c) or 644(2)(c) |
| |
| |
(b) | omit paragraph (b) and the word “or” before it, and |
| 20 |
(c) | for “earned income or relevant UK earnings” substitute “relevant |
| |
earnings or earned income”. |
| |
(3) | The power of the Treasury to make an order under section 281 or 283 of FA |
| |
2004 has effect as if Schedule 35 to that Act contained an amendment |
| |
substituting section 232(4) of this Act for that subsection as amended by sub- |
| 25 |
| |
| |
(a) | an individual has made an election under paragraph 12 of Schedule |
| |
22 to FA 2002 (election by barrister or advocate to accelerate |
| |
| 30 |
(b) | as a result of the election sub-paragraph (4) of that paragraph applies |
| |
in relation to the tax year 2004-05, and |
| |
(c) | the election is in force immediately before 6th April 2005, |
| |
| the election continues to apply in relation to the tax year 2005-06 and |
| |
subsequent tax years (despite paragraph 3 of this Schedule). |
| 35 |
59 | Section 104(4) of ICTA (which, despite its repeal, applies in relation to any |
| |
change of accounting basis occurring before 6th April 1999) does not apply |
| |
if the person who would be liable to tax as a result of the change was born |
| |
| |
| 40 |
60 (1) | Subject to sub-paragraph (4), section 256 applies before 6th April 2006 with |
| |
the following amendments. |
| |
(2) | In subsection (1)(b)— |
| |
(a) | after “from the trade was” insert “relevant earnings within section |
| |
623(2)(c) or 644(2)(c) of ICTA or”, and |
| 45 |
|
| |
|
| |
|
(b) | omit “or relevant UK earnings within section 189(2)(b) of FA 2004”. |
| |
(3) | In subsection (2) for “earned income or relevant UK earnings” substitute |
| |
“relevant earnings or earned income”. |
| |
(4) | The power of the Treasury to make an order under section 281 or 283 of FA |
| |
2004 has effect as if Schedule 35 to that Act contained an amendment |
| 5 |
substituting section 256 of this Act for that section as amended by sub- |
| |
paragraphs (2) and (3) above. |
| |
61 | Chapter 18 of Part 2 does not apply in relation to a post-cessation receipt if— |
| |
(a) | the person who would be liable to tax on the receipt was born before |
| |
| 10 |
(b) | the cessation of the trade occurred before 6th April 2000. |
| |
| |
| |
Apportionment of profits or losses to tax years before tax year 2005-06 |
| |
62 (1) | This paragraph applies if— |
| 15 |
(a) | a period of account of a property business begins before 6th April |
| |
2005 and ends on or after that date, and |
| |
(b) | in order to arrive at the profits or losses of a tax year before the tax |
| |
year 2005-06 it is necessary to apportion the profits or losses of the |
| |
period of account to any part of that period falling in a tax year before |
| 20 |
| |
(2) | The profits or losses of the period of account— |
| |
(a) | are calculated in accordance with Part 3 of this Act (and therefore, to |
| |
that extent, that Part has effect for tax years before the tax year 2005- |
| |
| 25 |
(b) | may be apportioned in accordance with section 275 to any part of the |
| |
period of account falling in a tax year before the tax year 2005-06. |
| |
| |
63 | Section 277 does not apply in relation to a lease granted pursuant to a |
| |
contract entered into before 4th April 1963. |
| 30 |
Lease premiums: sums payable instead of rent |
| |
64 | Section 279 does not apply in relation to a lease granted— |
| |
(a) | before 6th April 1963, or |
| |
(b) | pursuant to a contract entered into before 4th April 1963. |
| |
Lease premiums: sums payable for surrender of lease |
| 35 |
65 | Section 280 does not apply in relation to a lease granted— |
| |
(a) | before 6th April 1963, or |
| |
(b) | pursuant to a contract entered into before 4th April 1963. |
| |
|
| |
|
| |
|
Lease premiums: assignments for profit of lease granted at undervalue |
| |
66 | Section 282 does not apply in relation to a lease granted — |
| |
(a) | before 6th April 1963, or |
| |
(b) | pursuant to a contract entered into before 4th April 1963. |
| |
Lease premiums: pre-commencement receipts treated as taxed receipts |
| 5 |
67 (1) | This paragraph relates to the operation of sections 287 to 298 where, in |
| |
| |
(a) | there is a receipt of a Schedule A business or an overseas property |
| |
business (within the meaning of section 65A(4) or 70A(4) of ICTA) as |
| |
a result of section 34 or 35 of ICTA (treatment of premiums etc. as |
| 10 |
rent and assignments for profit of lease granted at an undervalue) for |
| |
a tax year before the tax year 2005-06 or an accounting period ending |
| |
before 6th April 2005, or |
| |
(b) | there would be such a receipt, but for the operation of section 37(2) |
| |
or (3) of ICTA (reductions in certain receipts under section 34 or 35 |
| 15 |
| |
| In this paragraph and paragraphs 68 and 69 such a receipt is referred to as a |
| |
“pre-commencement receipt”. |
| |
(2) | For the purposes of Chapter 4 of Part 3— |
| |
(a) | the lease is treated as a taxed lease, and |
| 20 |
(b) | the pre-commencement receipt is treated as a taxed receipt. |
| |
(3) | For the purposes of that Chapter, the “receipt period” of a taxed receipt |
| |
which is a pre-commencement receipt is— |
| |
(a) | in the case of a pre-commencement receipt as a result of section 34 of |
| |
ICTA, the period treated in calculating the amount of the receipt as |
| 25 |
being the duration of the lease, and |
| |
(b) | in the case of a pre-commencement receipt as a result of section 35 of |
| |
ICTA, the period treated in calculating the amount of the receipt as |
| |
being the duration of the lease remaining at the date of the |
| |
| 30 |
(4) | For the purposes of that Chapter the “unreduced amount” of a taxed receipt |
| |
which is a pre-commencement receipt is the amount of the pre- |
| |
commencement receipt as a result of section 34 or 35 of ICTA, before the |
| |
operation of section 37(2) or (3) of ICTA. |
| |
(5) | Sub-paragraph (6) applies to a taxed receipt which is a pre-commencement |
| 35 |
receipt arising as a result of section 34(2) of ICTA (obligation on tenant to |
| |
carry out work under lease). |
| |
(6) | If the obligation to carry out work included the carrying out of work which |
| |
gave or will give rise to expenditure for which an allowance has been, or |
| |
may be, made under the enactments relating to capital allowances, the |
| 40 |
unreduced amount of the taxed receipt is calculated as if the obligation had |
| |
not included the carrying out of that work. |
| |
Lease premiums: taking account of reductions in pre-commencement receipts |
| |
68 (1) | This paragraph applies if— |
| |
|
| |
|
| |
|
(a) | in calculating the amount of a pre-commencement receipt, there is a |
| |
reduction under section 37(2) or (3) of ICTA by reference to the |
| |
amount chargeable on the superior interest for the purposes of that |
| |
| |
(b) | as a result of paragraph 67 the amount chargeable on the superior |
| 5 |
interest is the taxed receipt for the purposes of Chapter 4 of Part 3. |
| |
(2) | References to a reduction under section 37(2) or (3) of ICTA in a pre- |
| |
commencement receipt by reference to the amount chargeable on the |
| |
superior interest are to the difference between— |
| |
(a) | the amount of the pre-commencement receipt before the operation of |
| 10 |
section 37(2) or (3) of ICTA, and |
| |
(b) | the amount of the receipt after the operation of that subsection, |
| |
| so far as attributable to the amount chargeable on the superior interest for |
| |
the purposes of section 37 of ICTA. |
| |
(3) | In sections 290(5)(a) (meaning of “unused amount”) and 295(1)(a) (limit on |
| 15 |
reductions and deductions) references to reductions under section 288 by |
| |
reference to the taxed receipt include references to reductions under section |
| |
37(2) or (3) of ICTA in pre-commencement receipts by reference to the |
| |
amount chargeable on the superior interest. |
| |
(4) | Sections 292 to 294 apply as follows— |
| 20 |
(a) | the pre-commencement receipt is treated as if it were a lease |
| |
premium receipt for the purposes of sections 293 and 294, |
| |
(b) | references in those sections to the reduction under section 288 by |
| |
reference to the taxed receipt are, in relation to the pre- |
| |
commencement receipt, to the reduction under section 37(2) or (3) of |
| 25 |
ICTA by reference to the amount chargeable on the superior interest, |
| |
| |
(c) | for the purposes of those sections the receipt period of the pre- |
| |
| |
(i) | in the case of a pre-commencement receipt as a result of |
| 30 |
section 34 of ICTA, the period treated in calculating the |
| |
amount of the receipt as being the duration of the lease, and |
| |
(ii) | in the case of a pre-commencement receipt as a result of |
| |
section 35 of ICTA, the period treated in calculating the |
| |
amount of the receipt as being the duration of the lease |
| 35 |
remaining at the date of the assignment. |
| |
Lease premiums: taking account of deductions for rent as a result of section 37(4) or 87(2) of |
| |
| |
69 (1) | Sub-paragraph (2) applies if— |
| |
(a) | in calculating the profits of a trade, profession or vocation for a tax |
| 40 |
year before the tax year 2005-06 or an accounting period ending |
| |
before 6th April 2005, a person is treated as paying rent under section |
| |
87(2) of ICTA by reference to the amount chargeable for the purposes |
| |
| |
(b) | as a result of paragraph 67 the amount chargeable is the taxed receipt |
| 45 |
for the purposes of Chapter 4 of Part 3. |
| |
(2) | References in sections 290(5)(b) and 295(2)(b) to the deductions allowed for |
| |
expenses under section 61 by reference to the taxed receipt include |
| |
references to the deductions allowed in calculating the profits of the trade, |
| |
|
| |
|
| |
|
profession or vocation for the rent that the person is treated as paying under |
| |
section 87(2) of ICTA by reference to the amount chargeable. |
| |
(3) | Sub-paragraph (4) applies if— |
| |
(a) | in calculating the profits of a Schedule A business or an overseas |
| |
property business (within the meaning of section 65A(4) or 70A(4) of |
| 5 |
ICTA) for a tax year before the tax year 2005-06 or an accounting |
| |
period ending before 6th April 2005, a person is treated as paying |
| |
rent as a result of section 37(4) of ICTA by reference to the amount |
| |
chargeable on the superior interest for the purposes of that section, |
| |
| 10 |
(b) | as a result of paragraph 67 the amount chargeable on the superior |
| |
interest is the taxed receipt for the purposes of Chapter 4 of Part 3. |
| |
(4) | References in sections 290(5)(c) and 295(1)(b) to the deductions allowed for |
| |
expenses under section 292 by reference to the taxed receipt include |
| |
references to the deductions allowed in calculating the profits of the |
| 15 |
Schedule A business or overseas property business (within the meaning of |
| |
section 65A(4) or 70A(4) of ICTA) for the rent that the person is treated as |
| |
paying as a result of section 37(4) of ICTA by reference to the amount |
| |
chargeable on the superior interest. |
| |
Lease premiums: rules for determining effective duration of lease |
| 20 |
70 (1) | In relation to a lease granted after 12th June 1969 and before 25th August |
| |
1971, for sections 303 and 304 substitute— |
| |
| “303 Rules for determining effective duration of lease |
| |
(1) | The following rules apply for determining the effective duration of a |
| |
lease for the purposes of this Chapter. |
| 25 |
Rule 1: Where the terms of a lease include provision for the |
| |
determination of the lease by notice given by the landlord, |
| |
the lease is not to be treated as granted for a term longer than |
| |
one ending at the earliest date on which it could be |
| |
determined by notice so given. |
| 30 |
| |
Rule 2: A lease is not to be treated as having been granted for a |
| |
term longer than one ending on a date before the end of the |
| |
term for which the lease was granted, if the terms of the lease |
| |
or any other circumstances make it unlikely that the lease will |
| 35 |
continue beyond that date. |
| |
| |
Rule 3: Where the terms of the lease include provision for the |
| |
extension of the lease beyond a given date by notice given by |
| |
the tenant, account may be taken of any circumstances |
| 40 |
making it likely that the lease will be so extended. |
| |
(2) | Rule 2 applies by reference to the facts known or ascertainable at the |
| |
time of the grant of the lease. |
| |
(3) | In applying the rules, it is assumed that all parties concerned, |
| |
whatever their relationship, act as if they were at arm’s length. |
| 45 |
(4) | In this section, in relation to Scotland, “term”, where referring to the |
| |
duration of a lease, means period.” |
| |
|
| |
|
| |
|
(2) | This paragraph does not apply if the determination is for the purposes of |
| |
section 281 (sums payable for variation or waiver of term of lease). |
| |
71 (1) | In relation to a lease granted before 13th June 1969, for sections 303 to 305 |
| |
| |
| “303 Rules for determining effective duration of lease |
| 5 |
(1) | The following rules apply for determining the effective duration of a |
| |
lease for the purposes of this Chapter. |
| |
Rule 1: Where the effective duration of a lease is being |
| |
determined after the date on which the lease has for any |
| |
reason come to an end, the duration is taken to have |
| 10 |
extended from its commencement to that date. |
| |
| |
Rule 2: Where the terms of the lease include provision for |
| |
the determination of the lease by notice given either by |
| |
the landlord or by the tenant, the lease is not to be |
| 15 |
treated as granted for a term longer than one ending at |
| |
the earliest date on which it could be determined by |
| |
| |
| |
Rule 3: A lease is not to be treated as having been granted |
| 20 |
for a term longer than one ending on a date before the |
| |
end of the term for which the lease was granted, if the |
| |
terms of the lease or any other circumstances make it |
| |
unlikely that the lease will continue beyond that date. |
| |
(2) | Rules 2 and 3 are subject to rule 1. |
| 25 |
(3) | Rules 2 and 3 apply in accordance with circumstances prevailing at |
| |
the time of the determination. |
| |
(4) | In this section, in relation to Scotland, “term”, where referring to the |
| |
duration of a lease, means period.” |
| |
(2) | This paragraph does not apply if the determination is for the purposes of |
| 30 |
section 281 (sums payable for variation or waiver of term of lease). |
| |
| |
72 (1) | Section 311 does not apply to a reverse premium— |
| |
(a) | which was received before 9th March 1999, or |
| |
(b) | to which the recipient was entitled immediately before that date. |
| 35 |
(2) | In determining whether a reverse premium was one to which the recipient |
| |
was entitled immediately before 9th March 1999, no account is to be taken of |
| |
any arrangements made on or after that date. |
| |
Deductions for expenditure on energy-saving items |
| |
73 | Sections 312 to 314 do not apply to expenditure incurred before 6th April |
| 40 |
| |
|
| |
|
| |
|
Commercial letting of furnished holiday accommodation |
| |
74 (1) | Subject to sub-paragraph (4), Chapter 6 of Part 3 applies before 6th April |
| |
2006 with the following amendments. |
| |
| |
(a) | after paragraph (b) insert— |
| 5 |
“(ba) | section 623(2)(c) or 644(2)(c) of ICTA (income |
| |
regarded as relevant earnings for pension purposes: |
| |
see section 504A of that Act),”, |
| |
(b) | at the end of paragraph (d) insert “and”, and |
| |
(c) | omit paragraph (f) and the word “and” before it. |
| 10 |
| |
(a) | before paragraph (a) insert— |
| |
“(aa) | income regarded as relevant earnings for pension |
| |
purposes under section 623(2)(c) or 644(2)(c) of ICTA, |
| |
| 15 |
(b) | omit paragraph (b) and the word “or” before it. |
| |
(4) | The power of the Treasury to make an order under section 281 or 283 of FA |
| |
2004 has effect as if Schedule 35 to that Act contained amendments |
| |
substituting sections 322(2) and 328(2) of this Act for those subsections as |
| |
amended by sub-paragraphs (2) and (3) above. |
| 20 |
75 (1) | Subject to sub-paragraph (3), section 504A of ICTA (as inserted by Schedule |
| |
1 to this Act) applies before 6th April 2006 with the following amendment. |
| |
| |
(a) | after paragraph (a) insert— |
| |
“(ab) | section 623(2)(c) or 644(2)(c) (income regarded as |
| 25 |
relevant earnings for pension purposes), and”, and |
| |
(b) | omit paragraph (c) and the word “and” before it. |
| |
(3) | The power of the Treasury to make an order under section 281 or 283 of FA |
| |
2004 has effect as if Schedule 35 to that Act contained an amendment |
| |
substituting section 504A of ICTA (as inserted by Schedule 1 to this Act) for |
| 30 |
that section as amended by sub-paragraph (2) above. |
| |
Adjustment on change of basis |
| |
76 (1) | Chapter 7 of Part 3 applies to a change of basis taking effect for a period of |
| |
account which ends on or after 6th April 2005. |
| |
(2) | For this purpose the period of account for which a change of basis takes |
| 35 |
effect is the first period of account for which the new basis is adopted. |
| |
Meaning of “mineral royalties” |
| |
77 | The definition of “mineral royalties” in section 341(2) does not include any |
| |
rent receivable before 6th April 1970. |
| |
|
| |
|