Income Tax (Trading and Other Income) Bill

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House of Commons

Session 2004 - 05
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Income Tax (Trading and Other Income) Bill

Income Tax (Trading and Other Income) Bill
xxii

Chapter 6
Release of loan to participator in close company
415
Charge to tax under Chapter 6
416
Income charged
417
Person liable
418
Relief where borrowers liable as settlors
419
Loans and advances to persons who die
420
Loans and advances to trustees of trusts that have ended
421
Income tax treated as paid
Chapter 7
Purchased life annuity payments
422
Charge to tax on purchased life annuity payments
423
Meaning of “purchased life annuity”
424
Income charged
425
Person liable
426
Annuity payments received after deduction of tax
Chapter 8
Profits from deeply discounted securities
Charge to tax under Chapter 8
427
Charge to tax on profits from deeply discounted securities
428
Income charged
429
Person liable
Deeply discounted securities
430
Meaning of “deeply discounted security”
431
Excluded occasions of redemption
432
Securities which are not deeply discounted securities
433
Meaning of “excluded indexed security”
434
Securities issued in separate tranches: preliminary
435
Securities issued in separate tranches: basic rule
436
Deeply discounted securities issued in separate tranches: nominal value rule
Disposals
437
Transactions which are disposals
438
Timing of transfers and acquisitions
Calculating profits
439
Calculating the profit from disposals
440
Market value disposals
441
Market value acquisitions
442
Securities issued in accordance with qualifying earn-out right

Income Tax (Trading and Other Income) Bill
xxiii

Special rules for strips of government securities
443
Application of this Chapter to strips of government securities
444
Meaning of “strip” in Chapter 8
445
Strips of government securities: acquisitions and disposals
446
Strips of government securities: relief for losses
447
Restriction of profits on strips by reference to original acquisition cost
448
Restriction of losses on strips by reference to original acquisition cost
449
Strips of government securities: manipulation of acquisition, transfer or
redemption payments
450
Market value of strips etc.
451
Market value of strips etc. quoted in foreign stock exchange lists
452
Power to modify this Chapter for strips
Special rules for listed securities held since 26th March 2003
453
Application of sections 454 to 456
454
Listed securities held since 26th March 2003: relief for losses
455
Listed securities held since 26th March 2003: calculating the profit or loss on
disposals
456
Securities issued to connected persons etc. at excessive price: subsequent
transfers to connected persons
Trustees
457
Trustees
458
Non-UK resident trustees
Miscellaneous and supplementary
459
Transfer of assets abroad
460
Minor definitions
Chapter 9
Gains from contracts for life insurance etc.
Charge to tax under Chapter 9
461
Charge to tax under Chapter 9
462
When gains arise from policies and contracts
463
Income charged
Person liable etc.
464
Person liable for tax: introduction
465
Person liable: individuals
466
Person liable: personal representatives
467
Person liable: UK resident trustees
468
Non-UK resident trustees and foreign institutions
469
Two or more persons interested in policy or contract
470
Interests in rights under a policy or contract for section 469
471
Determination of shares etc.
472
Trusts created by two or more persons

Income Tax (Trading and Other Income) Bill
xxiv

Policies and contracts to which Chapter 9 applies
473
Policies and contracts to which Chapter 9 applies: general
474
Special rules: qualifying policies
475
Special rules: personal portfolio bonds
476
Special rules: foreign policies
477
Special rules: certain older policies and contracts
478
Exclusion of mortgage repayment policies
479
Exclusion of pension policies
480
Exclusion of excepted group life policies
481
Excepted group life policies: conditions about benefits
482
Excepted group life policies: conditions about persons intended to benefit
483
Exclusion of credit union group life policies
When chargeable events occur: general
484
When chargeable events occur
485
Disregard of certain events in relation to qualifying policies
486
Exclusion of maturity of capital redemption policies in certain circumstances
487
Disregard of certain assignments
488
Disregard of some events after alterations of life insurance policy terms
489
Conditions applicable to alterations of life insurance policy terms
490
Last payment under guaranteed income bonds etc. treated as total surrender
Calculating gains: general
491
Calculating gains: general rules
492
The total benefit value of a policy or contract
493
The value of a policy or contract
494
The total allowable deductions for a policy or contract
495
Disregard of certain amounts in calculating gains under section 491
496
Modification of section 494 : qualifying endowment policies held as security
for company debts
497
Disregard of trivial inducement benefits
Part surrenders and assignments: periodic calculations and excess events
498
Requirement for periodic calculations in part surrender or assignment cases
499
Meaning of “insurance year” and “final insurance year”
500
Events treated as part surrenders
501
Part surrenders: loans
502
Exception from section 501 for loans to buy life annuities
503
Exception from section 501 for certain loans under qualifying policies
504
Part surrenders: payments under guaranteed income bonds etc.
505
Assignments etc. involving co-ownership
506
Assignments occurring when there is a co-ownership transaction
507
Method for making periodic calculations under section 498
508
The value of rights partially surrendered or assigned
509
Chargeable events in certain cases where periodic calculations show gains
Transaction-related calculations and part surrender or assignment events
510
Requirement for transaction-related calculations in certain part surrender and
assignment cases
511
Method for making transaction-related calculations under section 510

Income Tax (Trading and Other Income) Bill
xxv

512
Available premium left for relevant transaction
513
Special rules for part surrenders and assignments in final insurance year
514
Chargeable events where transaction-related calculations show gains
Personal portfolio bonds
515
Requirement for annual calculations in relation to personal portfolio bonds
516
Meaning of “personal portfolio bond”
517
Policies and contracts which are not personal portfolio bonds
518
The index categories
519
The index selection conditions
520
The property categories
521
The property selection conditions
522
Method for making annual calculations under section 515
523
The total amount of personal portfolio bond excesses
524
The total amount of part surrender gains
525
Chargeable events where annual calculations show gains
526
Power to make regulations about personal portfolio bonds
Reductions from gains
527
Reduction for sums taken into account otherwise than under Chapter 9
528
Reduction in amount charged: non-UK resident policy holders
529
Exceptions to section 528
Income tax treated as paid and reliefs
530
Income tax treated as paid etc.
531
Exceptions to section 530
532
Relief for policies and contracts with European Economic Area insurers
533
Meaning of “comparable EEA tax charge”
534
Regulations providing for relief in other cases where foreign tax chargeable
535
Top slicing relief
536
Top slicing relieved liability: one chargeable event
537
Top slicing relieved liability: two or more chargeable events
538
Recovery of tax from trustees
Deficiencies
539
Relief for deficiencies
540
When deficiencies arise: events following calculation events
541
Calculation of deficiencies
Supplementary
542
Replacement of qualifying policies
543
Issue time of qualifying policy replacing foreign policy
544
Application of Chapter to policies and contracts in which companies
interested
545
Minor definitions
546
Table of provisions subject to special rules for older policies and contracts

Income Tax (Trading and Other Income) Bill
xxvi

Chapter 10
Distributions from unauthorised unit trusts
547
Charge to tax under Chapter 10
548
Income charged
549
Person liable
550
Income tax treated as paid
Chapter 11
Transactions in deposits
551
Charge to tax on profits from disposal of deposit rights
552
Meaning of “deposit rights”
553
Income charged
554
Person liable
Chapter 12
Disposals of futures and options involving guaranteed returns
Charge to tax under Chapter 12
555
Charge to tax under Chapter 12
556
Income charged
557
Person liable
558
Meaning of “future”, “option” etc.
When disposals involve guaranteed returns
559
When disposals involve guaranteed returns
560
Production of guaranteed returns
561
The return from one or more disposals
When disposals of futures and options occur
562
When disposals of futures and options occur: general
563
Timing of certain grants of options where related disposals occur later
564
Deemed disposal where futures run to delivery or options are exercised
565
Interpretation of section 564
566
When transactions are related
Losses
567
Losses
Trustees
568
Special rule for certain income of trustees
Transfer of assets abroad
569
Anti-avoidance: transfer of assets abroad

Income Tax (Trading and Other Income) Bill
xxvii

Chapter 13
Sales of foreign dividend coupons
570
Charge to tax under Chapter 13
571
Meaning of “foreign holdings” etc.
572
Income charged
573
Person liable
Part 5
Miscellaneous income
Chapter 1
Introduction
574
Overview of Part 5
575
Provisions which must be given priority over Part 5
576
Priority between Chapters within Part 5
577
Territorial scope of Part 5 charges
Chapter 2
Receipts from intellectual property
Introduction
578
Contents of Chapter
Charge to tax on non-trading income from intellectual property
579
Charge to tax on royalties and other income from intellectual property
580
Income charged under section 579
581
Person liable for tax under section 579
582
Deductions in calculating certain income charged under section 579
Disposals of know-how
583
Charge to tax on income from disposals of know-how
584
Exceptions to charge under section 583
585
Income charged under section 583
586
Person liable for tax under section 583
Sales of patent rights
587
Charge to tax on income from sales of patent rights
588
Income charged under section 587
589
Person liable for tax under section 587
590
UK resident sellers: spreading rules
591
Non-UK resident sellers: election for spreading
592
Further provision about elections for spreading: instalments
593
Death of seller
594
Winding up of a body corporate

Income Tax (Trading and Other Income) Bill
xxviii

595
Deduction of tax from payments to non-UK residents
596
Adjustments where tax has been deducted
597
Licences connected with patents
598
Rights to acquire future patent rights
599
Sums paid for Crown use etc. treated as paid under licence
Relief from income tax on patent income
600
Relief for expenses: patent income
601
How relief is given under section 600
Payments received after deduction of tax
602
Payments received after deduction of tax
Supplementary
603
Contributions to expenditure
604
Contributions not made by public bodies nor eligible for tax relief
605
Exchanges
606
Apportionment where property sold together
607
Questions about apportionments affecting two or more persons
608
Meaning of “capital sums” etc.
Chapter 3
Films and sound recordings: non-trade businesses
609
Charge to tax on films and sound recordings businesses
610
Income charged
611
Person liable
612
Calculation of income
613
Application of trading income rules to non-trade businesses
Chapter 4
Certain telecommunication rights: non-trading income
614
Charge to tax on certain telecommunication rights of a non-trader
615
Income charged
616
Person liable
617
Deductions in calculating certain income charged
618
Payments received after deduction of tax
Chapter 5
Settlements: amounts treated as income of settlor
Charge to tax under Chapter 5
619
Charge to tax under Chapter 5
620
Meaning of “settlement” and “settlor”

© Parliamentary copyright 2004
Revised 1 December 2004