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Income Tax (Trading and Other Income) Bill


Income Tax (Trading and Other Income) Bill
Schedule 1 — Consequential amendments
Part 1 — Income and Corporation Taxes Act 1988

464

 

(b)   

in sub-paragraph (7)—

(i)   

before “tax” insert “corporation”, and

(ii)   

for “chargeable period” substitute “accounting period”.

      (9)  

In paragraph 11 for “chargeable period” substitute “accounting period”.

344        

Omit Schedule 5AA (guaranteed returns on transactions in futures and

5

options).

345        

Omit Schedule 15A (contractual savings schemes).

346   (1)  

Amend Schedule 15B (venture capital trusts: relief from income tax) as

follows.

      (2)  

In paragraph 4(1) and (2) omit “under Case VI of Schedule D”.

10

      (3)  

Omit paragraphs 7 to 9.

347   (1)  

Amend Schedule 20 (charities: qualifying investments and loans) as follows.

      (2)  

After paragraph 7 insert—

“7A        

Uncertificated eligible debt security units as defined in section

552(2) of ITTOIA 2005.”

15

      (3)  

In paragraph 8 for “section 56(5)” substitute “for corporation tax purposes in

section 56(5) above and for income tax purposes in section 552(2) of ITTOIA

2005”.

348   (1)  

Amend Schedule 22 (reduction of pension fund surpluses) as follows.

      (2)  

In paragraph 7(3)(c) for the words from “section 56” to “that section”

20

substitute “section 551 of ITTOIA 2005 shall by virtue of section 56(3)(b) of

this Act”.

      (3)  

After paragraph 7 insert—

“7A   (1)  

This paragraph applies if a calculation falls to be made under

paragraph 7 above in a case where—

25

(a)   

relief is to be given under section 454 of ITTOIA 2005

(listed deeply discounted securities held since 26th March

2003: relief for losses) in respect of a loss sustained on the

disposal of securities, and

(b)   

had there been a profit on the disposal it would have been

30

eligible for relief from tax for the year of assessment in

which the loss is sustained by virtue of section 592(2).

      (2)  

That relief is to be given before the calculation under paragraph 7

above is made.

      (3)  

Then the amount of income to which the specified percentage is

35

applied by virtue of sub-paragraph (3)(a) of that paragraph is

reduced by the amount of that relief.

      (4)  

In this paragraph “disposal” has the same meaning as in Chapter

8 of Part 4 of ITTOIA 2005.”

349        

In paragraph 11A(4) of Schedule 24 (assumptions for calculating chargeable

40

profits etc. of foreign companies) after “the Capital Allowances Act” insert

“or section 48 of ITTOIA 2005”.

 

 

Income Tax (Trading and Other Income) Bill
Schedule 1 — Consequential amendments
Part 2 — Other enactments

465

 

350   (1)  

Amend Schedule 27 (distributing funds) as follows.

      (2)  

In paragraph 1(1)(d) after “under” insert “—

(i)   

Chapter 4 of Part 4 of ITTOIA 2005 (dividends from

non-UK resident companies),

(ii)   

Chapter 8 of Part 5 of that Act (income not

5

otherwise charged) so far as it relates to relevant

foreign distributions (within the meaning given by

section 1A(8) of this Act), or

(iii)   

”.

      (3)  

In paragraph 3(1)(a)(i)—

10

(a)   

omit “Case IV or”, and

(b)   

after “Schedule D” insert “, or under ITTOIA 2005 on relevant foreign

income,”.

      (4)  

In paragraph 5(5) after “1996” insert “or section 714 or 715 of ITTOIA 2005”.

351   (1)  

Amend Schedule 28AA (provision not at arm’s length) as follows.

15

      (2)  

In paragraph 6A(3) for “(valuation of trading stock at discontinuance of

trade) (see subsection (2) of that section)” substitute “above (see subsection

(2) of that section) or Chapter 12 of Part 2 of ITTOIA 2005 (see section 174 of

that Act) (valuation of trading stock at discontinuance of trade)”.

      (3)  

In paragraph 6E after “Schedule D” insert “or Chapter 2 of Part 4 of ITTOIA

20

2005”.

      (4)  

In paragraph 11(1) after “section 492(1)” insert “above or section 16(1) of

ITTOIA 2005”.

352   (1)  

Amend Schedule 30 (transitional provisions and savings) as follows.

      (2)  

In paragraph 5—

25

(a)   

in sub-paragraph (6) omit paragraph (b) and the word “or” before it,

(b)   

in sub-paragraph (8) omit “section 113 of this Act or”,

(c)   

in sub-paragraph (11) omit “or vocation”, and

(d)   

after sub-paragraph (12) insert—

   “(13)  

This paragraph does not apply for the purposes of income

30

tax.”

      (3)  

Omit paragraphs 18 and 18A.

Part 2

Other enactments

Finance Act 1950 (c.15)

35

353        

The Finance Act 1950 is amended as follows.

354        

In section 40(3) (modification of section 39 in case of recoveries by assignees

and in certain cases of subsidiary companies)—

(a)   

omit “by the Special Commissioners under Case VI of Schedule D”,

and

40

(b)   

omit “under that Case”.

 

 

Income Tax (Trading and Other Income) Bill
Schedule 1 — Consequential amendments
Part 2 — Other enactments

466

 

Chevening Estate Act 1959 (c.49)

355        

The Chevening Estate Act 1959 is amended as follows.

356   (1)  

Amend section 2 (provisions as to income tax, estate duty and stamp duty)

as follows.

      (2)  

In subsection (1)—

5

(a)   

omit paragraph (a),

(b)   

in paragraph (b) for “Schedule D” substitute “Part 3 of the Income

Tax (Trading and Other Income) Act 2005”, and

(c)   

in paragraph (c) for the words from “Schedule C” to “annual

payment” substitute “the provisions of the Income Tax (Trading and

10

Other Income) Act 2005 specified in subsection (1A) in respect of the

income chargeable under those provisions”.

      (3)  

After subsection (1) insert—

“(1A)   

The provisions are—

(a)   

Chapter 2 of Part 4 (interest) so far as the income is yearly

15

interest or public revenue dividends (as defined in section

505(1A) of the Income and Corporation Taxes Act 1988),

(b)   

Chapter 7 of that Part (purchased life annuity payments),

(c)   

Chapter 10 of that Part (distributions from unauthorised unit

trusts),

20

(d)   

Chapter 13 of that Part (sales of foreign dividend coupons) so

far as the income arises from foreign holdings within section

571(1)(a) (meaning of “foreign holdings” in that Chapter),

(e)   

Chapter 2 of Part 5, so far as it relates to annual payments

(receipts from intellectual property),

25

(f)   

Chapter 4 of that Part, so far as it relates to annual payments

(certain telecommunication rights: non-trading income), and

(g)   

Chapter 7 of that Part (annual payments not otherwise

charged).”

Taxes Management Act 1970 (c.9)

30

357        

The Taxes Management Act 1970 is amended as follows.

358   (1)  

Amend section 7 (notice of liability to income tax and capital gains tax) as

follows.

      (2)  

In subsection (6)—

(a)   

in paragraph (c) for “Schedule F” substitute “Chapter 3 of Part 4 of

35

ITTOIA 2005 (dividends etc. from UK resident companies etc.)”, and

(b)   

for “Schedule F”, in the second place where it occurs, substitute

“dividend”.

      (3)  

In subsection (9) in each of paragraphs (a) and (aa) for “Chapter II of Part XIII

of the principal Act” substitute “Chapter 9 of Part 4 of ITTOIA 2005”.

40

359        

In section 8(1AA)(b) (personal returns) for “section 231 of the principal Act”

substitute “section 397(1) of ITTOIA 2005”.

360        

In section 8A(1AA)(b) (trustee’s returns) for “section 231 of the principal

Act” substitute “section 397(1) of ITTOIA 2005”.

 

 

Income Tax (Trading and Other Income) Bill
Schedule 1 — Consequential amendments
Part 2 — Other enactments

467

 

361        

In section 9(1) (returns to include self-assessment)—

(a)   

in paragraph (b) for “section 231 of the principal Act” substitute

“section 397(1) of ITTOIA 2005”,

(b)   

omit “233(1),” and “, 249(4), 421(1) or 547(5)”, and

(c)   

for “or section 626 of ITEPA 2003” substitute “, section 626 of ITEPA

5

2003 or section 399(2), 400(2), 414(1), 421(1) or 530(1) of ITTOIA

2005”.

362        

Omit section 9D (choice between different Cases of Schedule D).

363        

In section 12AA(1A)(b) (partnership returns) for “section 231 of the principal

Act” substitute “section 397(1) of ITTOIA 2005”.

10

364        

In section 12AB(5) (partnership return to include partnership statement) in

the definition of “tax credit” after “applies” insert “in the case of corporation

tax and section 397(1) of ITTOIA 2005 applies in the case of income tax”.

365        

In section 12AE(2) (choice between different Cases of Schedule D) omit

paragraph (a).

15

366   (1)  

Amend section 18 (interest paid without deduction of income tax) as

follows.

      (2)  

In subsection (3E)(b) for “relevant” substitute “deeply”.

      (3)  

For subsection (3F) substitute—

“(3F)   

In subsection (3E)(b) above “deeply discounted security” has the

20

same meaning as in Chapter 8 of Part 4 of ITTOIA 2005 (profits from

deeply discounted securities) (see section 430 of that Act).”

367   (1)  

Amend section 19 (information for purposes of Schedule A) as follows.

      (2)  

In subsection (1) after “profits or gains chargeable to tax” insert “under

Chapter 3 of Part 3 of ITTOIA 2005 as the profits of a UK property business

25

or”.

      (3)  

In the side-note after “for purposes of” insert “charge on profits of UK

property businesses or under”.

368        

In section 27(2) (settled property) for “section 660G(1) and (2) of the principal

Act” substitute “section 620 of ITTOIA 2005”.

30

369        

In section 30 (recovery of overpayment of tax, etc.) omit subsection (4).

370        

In section 30A(2) (assessing procedure) for “Schedule” substitute “Part or

Chapter of ITEPA 2003 or ITTOIA 2005”.

371        

In section 31(3) (appeals: right of appeal) omit “9D or”.

372        

In section 42(7) (procedure for making claims etc.) omit the “and” before

35

paragraph (d) and after that paragraph insert “and

(e)   

sections 111(1), 126(2), 129(2), 143, 185, 194 and 326 of ITTOIA

2005.”

373   (1)  

Amend section 46B (questions to be determined by Special Commissioners)

as follows.

40

      (2)  

In subsection (4)—

(a)   

omit “of the principal Act”,

 

 

Income Tax (Trading and Other Income) Bill
Schedule 1 — Consequential amendments
Part 2 — Other enactments

468

 

(b)   

in paragraph (a) for “Chapter 1A or 1B of Part XV” substitute

“Chapter 5 of Part 5 of ITTOIA 2005”,

(c)   

omit paragraph (b),

(d)   

in paragraph (c) after “743(1)” insert “of the principal Act”, and

(e)   

in paragraph (d) after “747(4)(a)” insert “of that Act”.

5

      (3)  

After subsection (4) insert—

“(4A)   

Any question as to the application of—

(a)   

Part XVI of the principal Act (administration of estates:

corporation tax), or

(b)   

Chapter 6 of Part 5 of ITTOIA 2005 (administration of estates:

10

income tax),

   

is a question to be determined by the Special Commissioners.”

      (4)  

In subsection (5) after paragraph (c) insert “or

(d)   

section 874 of ITTOIA 2005,”.

374        

In section 46C (jurisdiction of Special Commissioners over certain claims

15

included in returns) omit subsection (3)(a).

375        

In section 58(3)(b) (proceedings in tax cases in Northern Ireland) before

“section 11 of or paragraph 22” insert “section 186 of ITTOIA 2005,”.

376        

In section 59A(8)(b) (payments on account of income tax) for “section 231 of

the principal Act” substitute “section 397(1) of ITTOIA 2005”.

20

377   (1)  

Amend section 59B (payment of income tax and capital gains tax) as follows.

      (2)  

In subsection (1)—

(a)   

omit “233(1),” and “, 249(4), 421(1) or 547(5)”, and

(b)   

for “or section 626 of ITEPA 2003” substitute “, section 626 of ITEPA

2003 or section 399(2), 400(2), 414(1), 421(1) or 530(1) of ITTOIA

25

2005”.

      (3)  

In subsection (2)(b) (payment of income tax and capital gains tax) for

“section 231 of that Act” substitute “section 397(1) of ITTOIA 2005”.

378        

In section 90(1)(b) (disallowance of relief for interest on tax) for “any tax

purposes” substitute “any corporation tax purpose (but see also sections 54

30

and 869 of ITTOIA 2005 for corresponding rule for income tax purposes)”.

379   (1)  

Amend section 98 (special returns, etc) as follows.

      (2)  

In subsection (4DA)(c) for “section 98 of the Finance Act 2004” substitute

“section 758 of ITTOIA 2005”.

      (3)  

In the first column of the Table—

35

(a)   

omit the entry relating to regulations under section 326C of ICTA,

(b)   

omit the entry relating to section 660F of ICTA, and

(c)   

at the end insert—

“Section 75(5) of ITTOIA 2005.

Section 128 of ITTOIA 2005

40

Section 305 of ITTOIA 2005.

Section 647 of ITTOIA 2005.

Regulations under Chapter 3 of Part 6 of ITTOIA 2005.”

 

 

Income Tax (Trading and Other Income) Bill
Schedule 1 — Consequential amendments
Part 2 — Other enactments

469

 

      (4)  

In the second column of the Table—

(a)   

omit the entry relating to regulations under section 326C of ICTA,

and

(b)   

at the end insert—

“Section 75(4) of ITTOIA 2005.

5

Regulations under Chapter 3 of Part 6 of ITTOIA 2005.”

380        

In section 118(1) (interpretation) after the definition of “ITEPA 2003” insert—

““ITTOIA 2005” means the Income Tax (Trading and Other

Income) Act 2005,”.

381        

In Schedule 1A (claims etc. not included in returns), in paragraph 10(b), for

10

“(administration of estates)” substitute “(administration of estates:

corporation tax), or Chapter 6 of Part 5 of ITTOIA 2005 (administration of

estates: income tax)”.

382   (1)  

Amend Schedule 1B (claims for relief involving two or more years) as

follows.

15

      (2)  

In paragraph 1—

(a)   

in sub-paragraph (2) for the words from “are any of the following” to

“and the same” substitute “is a claim to which this Schedule applies

and the same”, and

(b)   

in sub-paragraph (3) for “includes—” to the end substitute “includes

20

a reference to amendments and revocations to which paragraph 4

below applies.”

      (3)  

In paragraph 3(1)—

(a)   

for “a trade of farming or market gardening claims that subsection

(2) or (3) of section 96 of the principal Act” substitute “a qualifying

25

trade, profession or vocation (within the meaning of Chapter 16 of

Part 2 of ITTOIA 2005) claims that Chapter 16 of Part 2 of ITTOIA

2005”, and

(b)   

after “that trade” insert “, profession or vocation”.

      (4)  

In paragraph 4(1)—

30

(a)   

in paragraph (a) for “claims that subsection (2) or (3) of section 96 of

the principal Act” substitute “claims that Chapter 16 of Part 2 of

ITTOIA 2005”, and

(b)   

in paragraph (b) for “subsection (9) of that section” substitute

“section 224(4) of that Act”.

35

      (5)  

In the italic cross-heading before paragraph 4 for “section 96(9)” substitute

section 224(4) of ITTOIA 2005”.

      (6)  

In paragraph 5—

(a)   

in sub-paragraph (1)—

(i)   

for “section 108 of the principal Act” substitute “section 257

40

of ITTOIA 2005”, and

(ii)   

for the words from “the date” to “change of basis took place”

substitute “the date of the cessation”, and

(b)   

in sub-paragraph (5) for “section 105 of the principal Act” substitute

“section 254 of ITTOIA 2005”.

45

 

 

Income Tax (Trading and Other Income) Bill
Schedule 1 — Consequential amendments
Part 2 — Other enactments

470

 

383        

In paragraph 10 of Schedule 3 (rules for assigning proceedings to General

Commissioners) after “of the principal Act” insert “, section 186 of ITTOIA

2005”.

384        

In paragraph 2(4) of Schedule 3A (electronic lodgement of tax returns, etc.)

after “ITEPA 2003” insert “or ITTOIA 2005”.

5

Finance Act 1971 (c. 68)

385        

The Finance Act 1971 is amended as follows.

386        

In paragraph 8(2)(b) of Schedule 3 (taxation of refunds of contributions and

certain other payments) for “to tax on the amount of the payment under

Case VI of Schedule D” substitute “—

10

(i)   

to income tax on the full amount of the payment

arising in the year of assessment; or

(ii)   

to corporation tax on the amount of the payment

under Case VI of Schedule D”.

Finance Act 1973 (c. 51)

15

387        

The Finance Act 1973 is amended as follows.

388        

In Schedule 15 (territorial extension of charge to tax: supplementary

provisions), in paragraphs 2(a) and 4(1), for “or section 830 of the Taxes Act

1988” substitute “, section 830 of the Taxes Act 1988 or section 874 of the

Income Tax (Trading and Other Income) Act 2005”.

20

Biological Standards Act 1975 (c. 4)

389        

The Biological Standards Act 1975 is amended as follows.

390   (1)  

Amend section 2 (exemption of the National Biological Standards Board

from income tax and corporation tax) as follows.

      (2)  

In subsection (4)—

25

(a)   

for paragraph (a) substitute—

“(a)   

under Chapter 3 of Part 3 of the Income Tax (Trading

and Other Income) Act 2005 (“ITTOIA 2005”) in

respect of the profits of a UK property business or

under Schedule A;”,

30

(b)   

in paragraph (b) at the beginning insert “under the provisions of

ITTOIA 2005 specified in subsection (4A) in respect of the income

charged under those provisions received by the Board or”, and

(c)   

in paragraph (c) for “under Schedule F” substitute “under Chapter 3

of Part 4 of ITTOIA 2005 (dividends etc. from UK resident companies

35

etc.)”.

      (3)  

After that subsection insert—

“(4A)   

The provisions are—

(a)   

Chapter 2 of Part 4 (interest) so far as the income is yearly

interest or public revenue dividends (as defined in section

40

505(1A) of the Income and Corporation Taxes Act 1988),

(b)   

Chapter 7 of that Part (purchased life annuity payments),

 

 

 
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