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House of Commons

Session 2004 - 05 Internet Publications Other Bills before Parliament

Income Tax (Trading and Other Income) Bill

Income Tax (Trading and Other Income) Bill viii
Assets of mutual concerns
104    Distribution of assets of mutual concerns
Industrial development grants
105    Industrial development grants
Proceeds of insurance etc.
106    Sums recovered under insurance policies etc.
Chapter 7
Trade profits: gifts to charities etc.
107    Professions and vocations
108    Gifts of trading stock to charities etc.
109    Receipt by donor or connected person of benefit attributable to certain gifts
110    Meaning of “designated educational establishment”
Chapter 8
Trade profits: herd basis rules
Introduction
111    Election for application of herd basis rules
112    Meaning of “animal”, “herd”, “production herd” etc.
113    Other interpretative provisions
The herd basis rules
114    Initial cost of herd and value of herd
115    Addition of animals to herd
116    Replacement of animals in herd
117    Amount of receipt if old animal slaughtered under disease control order
118    Sale of animals from herd
119    Sale of whole or substantial part of herd
120    Acquisition of new herd begun within 5 years of sale
121    Section 120: sale for reasons outside farmer’s control
122    Replacement of part sold begun within 5 years of sale
123    Section 122: sale for reasons outside farmer’s control
Elections
124    Herd basis elections
125    Five year gap in which no production herd kept
126    Slaughter under disease control order
Preventing abuse of the herd basis rules
127    Preventing abuse of the herd basis rules
Income Tax (Trading and Other Income) Bill ix
Supplementary
128    Information if election made
129    Further assessment etc. if herd basis rules apply
Chapter 9
Trade profits: films and sound recordings
Introduction
130    Expenditure to which this Chapter applies
131    Meaning of “film” and related expressions
132    Meaning of “original master version” and “certified master version”
133    Meaning of “relevant period”
Expenditure treated as revenue in nature
134    Expenditure treated as revenue in nature
Films and sound recordings: normal rules for allocating expenditure
135    Films and sound recordings: production or acquisition expenditure
Certified master versions: special rules for allocating expenditure
136    Application of provisions about certified master versions
137    Certified master versions: preliminary expenditure
138    Certified master versions: production or acquisition expenditure
Certified master versions: limited-budget films
139    Certified master versions: production expenditure on limited-budget films
140    Certified master versions: acquisition expenditure on limited-budget films
141    “Total production expenditure in respect of the original master version”
142    When expenditure is incurred
Election for sections 134 to 140 not to apply
143    Election for sections 134 to 140 not to apply
Supplementary
144    Meaning of “genuinely intended for theatrical release”
Chapter 10
Trade profits: certain telecommunication rights
145    Professions and vocations
146    Meaning of “relevant telecommunication right”
147    Expenditure and receipts treated as revenue in nature
148    Credits or debits arising from revaluation
Income Tax (Trading and Other Income) Bill x
Chapter 11
Trade profits: other specific trades
Dealers in securities etc.
149    Taxation of amounts taken to reserves
150    Conversion etc. of securities held as circulating capital
151    Exchanges of gilts for gilt strips
152    Consolidation of gilt strips
153    Meaning of “gilt-edged security” and “strip”
154    Regulations for determining market value of securities or strips
Persons authorised for purposes of FISMA 2000
155    Levies and repayments under FISMA 2000
Dealers in land etc.
156    Purchase or sale of woodlands
157    Relief in respect of mineral royalties
158    Lease premiums etc: reduction of receipts
Ministers of religion
159    Ministers of religion
Barristers and advocates
160    Alternative basis of calculation in early years of practice
Mineral exploration and access
161    Mineral exploration and access
Persons liable to pool betting duty
162    Payments by persons liable to pool betting duty
Intermediaries treated as making employment payments
163    Deduction for deemed employment payment
164    Special rules for partnerships
Waste disposal
165    Deduction for site preparation expenditure
166    Allocation of site preparation expenditure
167    Site preparation expenditure: supplementary
168    Site restoration payments
Cemeteries and crematoria
169    Cemeteries and crematoria: introduction
Income Tax (Trading and Other Income) Bill xi
170    Deduction for capital expenditure
171    Allocation of ancillary capital expenditure
172    Exclusion of expenditure met by subsidies
Chapter 12
Trade profits: valuation of stock and work in progress
Valuation of trading stock
173    Valuation of trading stock on cessation
174    Meaning of “trading stock”
175    Basis of valuation of trading stock
176    Sale basis of valuation: sale to unconnected person
177    Sale basis of valuation: sale to connected person
178    Sale basis of valuation: election by connected persons
179    Connected persons
180    Cost to buyer of stock valued on sale basis of valuation
181    Meaning of “sale” and related expressions
Valuation of work in progress
182    Valuation of work in progress on cessation
183    Meaning of “work in progress”
184    Basis of valuation of work in progress
185    Election for valuation at cost
Supplementary
186    Determination of questions by Commissioners
Chapter 13
Deductions from profits: unremittable amounts
187    Professions and vocations
188    Application of Chapter
189    Relief for unremittable amounts
190    Restrictions on relief
191    Withdrawal of relief
Chapter 14
Disposal and acquisition of know-how
192    Meaning of “know-how” etc.
193    Disposal of know-how if trade continues to be carried on
194    Disposal of know-how as part of disposal of all or part of a trade
195    Seller controlled by buyer etc.
Income Tax (Trading and Other Income) Bill xii
Chapter 15
Basis periods
Introduction
196    Professions and vocations
Accounting date
197    Meaning of “accounting date”
The normal rules
198    General rule
199    First tax year
200    Second tax year
201    Tax year in which there is no accounting date
202    Final tax year
Apportionment of profits
203    Apportionment etc. of profits to basis periods
Overlap profits and losses
204    Meaning of “overlap period” and “overlap profit”
205    Deduction for overlap profit in final tax year
206    Restriction on bringing losses into account twice
207    Treatment of business start-up payments received in an overlap period
Rules where first accounting date shortly before end of tax year
208    When the late accounting date rules apply
209    Rule if there is an accounting date
210    Rules if there is no accounting date
Slight variations in accounting date
211    Treating middle date as accounting date
212    Consequence of treating middle date as accounting date
213    Circumstances in which middle date not treated as accounting date
Special rules if accounting date changes
214    When a change of accounting date occurs
215    Change of accounting date in third tax year
216    Change of accounting date in later tax year
217    Conditions for basis period to end with new accounting date
218    Commercial reasons for change of accounting date
219    The year after an ineffective change of accounting date
220    Deduction for overlap profit on change of accounting date
Income Tax (Trading and Other Income) Bill xiii
Chapter 16
Averaging profits of farmers and creative artists
221    Claim for averaging of fluctuating profits
222    Circumstances in which claim may be made
223    Adjustment of profits
224    Effect of adjustment
225    Effect of later adjustment of profits
Chapter 17
Adjustment income
Introduction
226    Professions and vocations
Adjustment on change of basis
227    Application of Chapter
228    Adjustment income and adjustment expense
229    Income charged
230    Person liable
231    Calculation of the adjustment
Treatment of adjustment income and adjustment expense
232    Treatment of adjustment income
233    Treatment of adjustment expense
Expenses previously brought into account
234    No adjustment for certain expenses previously brought into account
Realising or writing off assets
235    Cases where adjustment not required until assets realised or written off
Mark to market
236    Change from realisation basis to mark to market
237    Election for spreading if section 236 applies
Spreading of adjustment income: barristers and advocates
238    Spreading on ending of exemption for barristers and advocates
239    Election to accelerate charge under section 238
Supplementary
240    Liability of personal representatives if person liable dies
Income Tax (Trading and Other Income) Bill xiv
Chapter 18
Post-cessation receipts
Introduction
241    Professions and vocations
Charge to tax on post-cessation receipts
242    Charge to tax on post-cessation receipts
243    Extent of charge to tax
244    Income charged
245    Person liable
Meaning of "post-cessation receipts"
246    Basic meaning of “post-cessation receipt”
247    Other rules about what counts as post-cessation receipts
Sums treated as post-cessation receipts
248    Debts paid after cessation
249    Debts released after cessation
250    Receipts relating to post-cessation expenditure
251    Transfer of rights if transferee does not carry on trade
Sums that are not post-cessation receipts
252    Transfer of trading stock or work in progress
253    Lump sums paid to personal representatives for copyright etc.
Deductions
254    Allowable deductions
255    Further rules about allowable deductions
Reliefs
256    Treatment of post-cessation receipts
257    Election to carry back
Chapter 19
Supplementary
258    Changes in trustees and personal representatives
259    Meaning of “statutory insolvency arrangement”

© Parliamentary copyright 2004	Revised 1 December 2004