|
| |
|
| |
(a) | in sub-paragraph (1) for “person who is chargeable to tax” substitute |
| |
“company which is chargeable to corporation tax”, |
| |
(b) | in sub-paragraph (2)(c) for “the time allowed” substitute “twelve |
| |
months of the end of the first accounting period to which the new |
| 5 |
| |
(c) | omit sub-paragraph (3), |
| |
(d) | in sub-paragraph (4) for “tax” substitute “corporation tax”, and |
| |
(e) | in sub-paragraph (5) for “tax”, in each place where it occurs, |
| |
substitute “corporation tax”. |
| 10 |
(6) | Omit paragraphs 11 and 12. |
| |
| |
(a) | in sub-paragraph (1) for “computed” to the end substitute |
| |
“computed as if the partnership were a company resident in the |
| |
| 15 |
(b) | omit sub-paragraphs (3), (4) and (6). |
| |
| |
(9) | For paragraph 15 substitute— |
| |
“15 | In this Schedule “adjustment charge” means a charge under Part 2 |
| |
| 20 |
| |
(a) | in sub-paragraph (2) omit paragraph (a), and |
| |
(b) | in sub-paragraph (3) omit “9ZA or” and “personal, trustee or”. |
| |
579 (1) | Amend paragraph 64 of Schedule 25 (transitional provisions concerning |
| |
loan relationships in the case of authorised unit trusts and open-ended |
| 25 |
investment companies) as follows. |
| |
(2) | At the beginning of sub-paragraph (7) insert “Subject to sub-paragraph (9),”. |
| |
(3) | After sub-paragraph (8) insert— |
| |
“(9) | So far as sub-paragraphs (3) to (6) are capable of applying at any |
| |
time after 5th April 2005— |
| 30 |
(a) | they have effect as if any reference in them to a relevant |
| |
discounted security were a reference to a security that is a |
| |
deeply discounted security for the purposes of Chapter 8 |
| |
of Part 4 of the Income Tax (Trading and Other Income) |
| |
Act 2005 (profits from deeply discounted securities) (see |
| 35 |
| |
(b) | in those sub-paragraphs— |
| |
“redeem” means make a disposal, within the meaning |
| |
of that Chapter (except by a transfer within the |
| |
meaning of that Chapter), or convert as mentioned |
| 40 |
in section 437(1)(c) of that Act, and |
| |
“transfer” has the same meaning as in that Chapter.” |
| |
580 | In Schedule 29 (gains and losses of a company from intangible fixed assets), |
| |
in paragraph 101(3), for “Chapter 1A of Part 15 of the Taxes Act 1988 |
| |
(settlements: liability of settlor) (see section 660G(1) and (2) of that Act)” |
| 45 |
|
| |
|
| |
|
substitute “Chapter 5 of Part 5 of the Income Tax (Trading and Other |
| |
Income) Act 2005 (see section 620 of that Act)”. |
| |
Proceeds of Crime Act 2002 (c. 29) |
| |
581 | The Proceeds of Crime Act 2002 is amended as follows. |
| |
582 | In section 319(2) (source of income) for “Case 6 of Schedule D” substitute |
| 5 |
“Chapter 8 of Part 5 of the Income Tax (Trading and Other Income) Act |
| |
| |
583 (1) | Amend Schedule 10 (tax) as follows. |
| |
(2) | In paragraph 2(7) (introductory) at the end insert “, and “ITTOIA 2005” |
| |
means the Income Tax (Trading and Other Income) Act 2005”. |
| 10 |
(3) | In paragraph 5 (relevant discounted securities)— |
| |
(a) | for “relevant” substitute “deeply”, and |
| |
(b) | for the words from “Schedule 13” to “c.8)” and “that Schedule” |
| |
substitute respectively “Chapter 8 of Part 4 of ITTOIA 2005” and |
| |
| 15 |
(4) | In paragraph 6 (rights to receive amounts stated in certificates of deposit |
| |
| |
(a) | after “deposit etc.)” insert “, or a right falling within the definition of |
| |
“deposit rights” in section 552(1) of ITTOIA 2005”, and |
| |
(b) | for the words “of that Act”, in the second place where they occur, |
| 20 |
substitute “of the Taxes Act 1988 or Chapter 11 of Part 4 of ITTOIA |
| |
| |
(5) | In paragraph 8 (futures and options)— |
| |
(a) | for “paragraph 4 of Schedule 5AA to the Taxes Act 1988” substitute |
| |
“section 562 of ITTOIA 2005”, and |
| 25 |
(b) | for “that Schedule” substitute “Chapter 12 of Part 4 of that Act”. |
| |
(6) | In paragraph 11 (trading stock)— |
| |
(a) | in sub-paragraph (3) after “1988” insert “or section 173 of ITTOIA |
| |
2005” and after “discontinuance” insert “or cessation”, and |
| |
(b) | in sub-paragraph (4) for “that section” substitute “section 100 of the |
| 30 |
Taxes Act 1988 or (as the case may be) section 174 of ITTOIA 2005”. |
| |
Income Tax (Earnings and Pensions) Act 2003 (c. 1) |
| |
584 | The Income Tax (Earnings and Pensions) Act 2003 is amended as follows. |
| |
585 | In section 6(5) (exception to charge to tax on employment income for income |
| |
of divers and diving supervisors) for the words from “Case I” to “ICTA” |
| 35 |
substitute “Part 2 of ITTOIA 2005 (trading income) by virtue of section 15 of |
| |
| |
586 | In section 61(1) (application of provisions to workers under arrangements |
| |
made by intermediaries: interpretation) in the definition of “business” after |
| |
“includes a” insert “UK property business or”. |
| 40 |
587 | In section 178 (exception for loans where interest qualifies for tax relief)— |
| |
| |
(i) | for “under Case I or II of Schedule D” substitute “to tax”, and |
| |
|
| |
|
| |
|
(ii) | after “carried on” insert “wholly or partly in the United |
| |
| |
(b) | in paragraph (d) for “under Schedule A in respect of a Schedule A |
| |
business” substitute “to tax in respect of a UK property business, or |
| |
| 5 |
588 | In section 180(5) (threshold for benefit of loan to be treated as earnings)— |
| |
| |
(i) | for “under Case I or II of Schedule D” substitute “to tax”, and |
| |
(ii) | after “carried on” insert “wholly or partly in the United |
| |
| 10 |
(b) | in paragraph (d) for “under Schedule A in respect of a Schedule A |
| |
business” substitute “to tax in respect of a UK property business, or |
| |
| |
589 | In section 189(3)(a) (exception where double charge) for “section 677 of ICTA |
| |
(sums paid to settlor otherwise than as income)” substitute “section 633 of |
| 15 |
ITTOIA 2005 (capital sums paid to settlor by trustees of settlement)”. |
| |
590 | In section 215 for “section 331(1) of ICTA” substitute “section 776(1) of |
| |
| |
591 | In section 302(4) (exemption of consular employees’ employment income), |
| |
in the definition of “reciprocal arrangement”, for “and section 322 of ICTA” |
| 20 |
substitute “, sections 646A and 681A of this Act and section 771 of ITTOIA |
| |
2005 (relevant foreign income of consular officers and employees)”. |
| |
592 | After section 325 insert— |
| |
“325A | Health and employment insurance payments |
| |
(1) | No liability to income tax in respect of employment income arises on |
| 25 |
any payment if or to the extent that— |
| |
(a) | were the payment an annual payment falling within Chapter |
| |
7 of Part 5 of ITTOIA 2005, it would be exempt from income |
| |
tax under section 735 of that Act (health and employment |
| |
| 30 |
(b) | it meets conditions A and B. |
| |
(2) | Condition A is that the payments are made— |
| |
(a) | to a person (“the employee”) who made payments or |
| |
contributions in respect of premiums under an insurance |
| |
policy which another person took out wholly or partly for the |
| 35 |
| |
(b) | to the employee’s husband or wife. |
| |
(3) | Condition B is that the payments are attributable on a just and |
| |
reasonable basis to the payments or contributions in respect of |
| |
| 40 |
593 | In section 357(2) (business entertainment and gifts: exception where |
| |
employer’s expenses disallowed) after “disallowed under” insert “section 45 |
| |
or 867 of ITTOIA 2005 or under”. |
| |
|
| |
|
| |
|
594 | In Chapter 2 of Part 5, after section 360 insert— |
| |
“360A | Social security contributions |
| |
(1) | No deduction from earnings is allowed under this Chapter for any |
| |
contribution paid by any person under Part 1 of SSCBA 1992 or Part |
| |
| 5 |
(2) | But this prohibition does not apply to an employer’s contribution |
| |
(see subsection (3)) which is allowable as a deduction— |
| |
(a) | under section 336 (the general rule), |
| |
(b) | under any of sections 337 to 342 (travel expenses), or |
| |
(c) | under section 351(1) (expenses of ministers of religion). |
| 10 |
(3) | For this purpose “an employer’s contribution” means— |
| |
(a) | a secondary Class 1 contribution, |
| |
(b) | a Class 1A contribution, or |
| |
(c) | a Class 1B contribution, |
| |
| within the meaning of Part 1 of SSCBA 1992 or Part 1 of SSCB(NI)A |
| 15 |
| |
595 | In section 394(2) (charge on benefit to which Chapter 2 of Part 6 applies) for |
| |
“to tax under Case VI of Schedule D” substitute “to income tax”. |
| |
596 | In section 397(1) (certain lump sums: calculation of amount taxed by virtue |
| |
of section 394) for “Case VI of Schedule D” substitute “subsection (2) of that |
| 20 |
| |
597 | In section 399(1)(b) (employment-related loans: interest treated as paid) omit |
| |
“under Case VI of Schedule D”. |
| |
598 | In section 476 (charge on occurrence of chargeable event) for subsection (5) |
| |
| 25 |
“(5) | If the employee has been divested of the employment-related |
| |
securities option by operation of law— |
| |
(a) | income tax is charged on the amount determined under |
| |
| |
(b) | the person liable for any tax so charged is the relevant person |
| 30 |
in relation to the chargeable event (see section 477(7)).” |
| |
599 | In section 477(7) (chargeable events) for “(charge under Case VI of Schedule |
| |
D)” substitute “(charge to income tax)”. |
| |
600 (1) | Amend section 493 (no charge on acquisition of dividend shares) as follows. |
| |
(2) | Omit subsections (1), (2) and (4). |
| 35 |
(3) | After subsection (3) insert— |
| |
“(3A) | For the exemption of such amounts from income tax, see section 770 |
| |
of ITTOIA 2005 (amounts applied by SIP trustees acquiring dividend |
| |
shares or retained for reinvestment).” |
| |
601 | For section 496 (no charge on cash dividend retained for reinvestment) |
| 40 |
|
| |
|
| |
|
| |
“496 | No charge on cash dividend retained for reinvestment |
| |
For the exemption from income tax of amounts retained under |
| |
paragraph 68(2) of Schedule 2 (amount of cash dividend not |
| |
reinvested), see section 770 of ITTOIA 2005 (amounts applied by SIP |
| 5 |
trustees acquiring dividend shares or retained for reinvestment).” |
| |
602 | In section 497(3) (limitations on charges on shares ceasing to be subject to |
| |
plan) for the words from “as” to the end substitute “under Chapter 3 or 4 of |
| |
Part 4 of ITTOIA 2005 (dividends etc. from UK or non-UK resident |
| |
companies etc.) as a result of section 394(2) or 407(2) of that Act (distribution |
| 10 |
or dividend payment when dividend shares cease to be subject to plan).” |
| |
603 | In section 502(4)(a) (meaning of “capital receipt” in section 501) at the end |
| |
insert “or section 770 of ITTOIA 2005 (exemption for amounts applied by SIP |
| |
trustees acquiring dividend shares or retained for reinvestment)”. |
| |
604 (1) | Amend section 515 (tax advantages and charges under other Acts) as |
| 15 |
| |
(2) | In subsection (1) omit paragraph (a). |
| |
(3) | In subsection (2) omit “and” at the end of paragraph (a). |
| |
(4) | In subsection (2) at the end of paragraph (b) insert “, and |
| |
(c) | sections 392 to 395 and 405 to 408 of ITTOIA 2005 (SIPs: |
| 20 |
special rules for charges under Chapters 3 and 4 of Part 4 of |
| |
that Act (dividends etc. from UK or non-UK resident |
| |
companies etc.)) and section 770 of that Act (exemption for |
| |
amounts applied by SIP trustees acquiring dividend shares |
| |
or retained for reinvestment).” |
| 25 |
605 | In section 516(4) (approved SAYE option schemes), in the definition of |
| |
“SAYE option scheme”, for “approved savings schemes” substitute |
| |
“approved savings arrangements”. |
| |
606 (1) | Amend section 575 (taxable pension income: foreign pensions) as follows. |
| |
(2) | In subsection (1) for the words “the amount” onwards substitute “the full |
| 30 |
amount of the pension income arising in the tax year, but subject to |
| |
subsections (2) and (3).” |
| |
(3) | For subsection (2) substitute— |
| |
“(2) | The full amount of the pension income arising in the tax year is to be |
| |
calculated on the basis that the pension is 90% of its actual amount, |
| 35 |
unless as a result of subsection (3) the pension income is charged in |
| |
accordance with section 832 of ITTOIA 2005 (relevant foreign income |
| |
charged on the remittance basis). |
| |
(3) | That pension income is treated as relevant foreign income for the |
| |
purposes of Chapters 2 and 3 of Part 8 of that Act (relevant foreign |
| 40 |
income: remittance basis and deductions and reliefs). |
| |
(4) | But if that pension income arises in the Republic of Ireland, section |
| |
839 of that Act (annual payments payable out of relevant foreign |
| |
income) applies with the omission of condition B and subsection |
| |
| 45 |
|
| |
|
| |
|
(5) | See also Chapter 4 of that Part (unremittable income).” |
| |
607 (1) | Amend section 613 (taxable pension income: foreign annuities) as follows. |
| |
(2) | In subsection (2) for the words “the amount” onwards substitute “the full |
| |
amount of the annuity arising in the tax year, but subject to subsections (3) |
| |
| 5 |
(3) | For subsections (3) and (4) substitute— |
| |
“(3) | The full amount of the annuity arising in the tax year is to be |
| |
calculated on the basis that the annuity is 90% of its actual amount, |
| |
unless as a result of subsection (4) the annuity is charged in |
| |
accordance with section 832 of ITTOIA 2005 (relevant foreign income |
| 10 |
charged on the remittance basis). |
| |
(4) | The annuity is treated as relevant foreign income for the purposes of |
| |
Chapters 2 and 3 of Part 8 of that Act (relevant foreign income: |
| |
remittance basis and deductions and reliefs). |
| |
(5) | But if the annuity arises in the Republic of Ireland, section 839 of that |
| 15 |
Act (annual payments payable out of relevant foreign income) |
| |
applies with the omission of condition B and subsection (5)(a). |
| |
(6) | See also Chapter 4 of that Part (unremittable income). |
| |
608 (1) | Amend section 631 (taxable pension income: pre-1973 pensions paid under |
| |
the Overseas Pensions Act 1973) as follows. |
| 20 |
(2) | In subsection (1) for the words “the amount” onwards substitute “the full |
| |
amount of the pension income arising in the tax year”. |
| |
(3) | For subsection (2) substitute— |
| |
“(2) | The full amount of the pension income arising in the tax year is to be |
| |
calculated on the basis that the pension is 90% of its actual amount. |
| 25 |
(3) | The pension income is treated as relevant foreign income for the |
| |
purposes of section 838 of that Act (expenses attributable to |
| |
collection or payment of relevant foreign income).” |
| |
609 (1) | Amend section 635 (taxable pension income: foreign voluntary annual |
| |
| 30 |
(2) | In subsection (2) for the words “the amount” onwards substitute “the full |
| |
amount of the pension income arising in the tax year, but subject to |
| |
subsections (3) and (4)”. |
| |
(3) | For subsection (3) substitute— |
| |
“(3) | The full amount of the pension income arising in the tax year is to be |
| 35 |
calculated on the basis that the pension is 90% of its actual amount, |
| |
unless as a result of subsection (4) the pension income is charged in |
| |
accordance with section 832 of ITTOIA 2005 (relevant foreign income |
| |
charged on the remittance basis). |
| |
(4) | That pension income is treated as relevant foreign income for the |
| 40 |
purposes of Chapters 2 and 3 of Part 8 of that Act (relevant foreign |
| |
income: remittance basis and deductions and reliefs). |
| |
|
| |
|
| |
|
(5) | But if that pension income arises in the Republic of Ireland, section |
| |
839 of that Act (annual payments payable out of relevant foreign |
| |
income) applies with the omission of condition B and subsection |
| |
| |
(6) | See also Chapter 4 of that Part (unremittable income).” |
| 5 |
610 | After section 644 insert— |
| |
“644A | Health and employment insurance payments |
| |
(1) | No liability to income tax arises in respect of a pension or annuity |
| |
payment if or to the extent that— |
| |
(a) | were the payment an annual payment falling within Chapter |
| 10 |
7 of Part 5 of ITTOIA 2005, it would be exempt from income |
| |
tax under section 735 of that Act (health and employment |
| |
| |
(b) | it meets conditions A and B. |
| |
(2) | Condition A is that the payments are made— |
| 15 |
(a) | to a person (“the pensioner”) who made payments or |
| |
contributions in respect of premiums under an insurance |
| |
policy which another person took out wholly or partly for the |
| |
| |
(b) | to the pensioner’s husband or wife. |
| 20 |
(3) | Condition B is that the payments are attributable on a just and |
| |
reasonable basis to the payments or contributions in respect of |
| |
| |
611 | After section 646 insert— |
| |
“646A | Foreign pensions of consular employees |
| 25 |
(1) | No liability to income tax arises in respect of foreign pension income |
| |
of a consular officer or employee in the United Kingdom for a foreign |
| |
| |
(a) | Her Majesty by Order in Council directs that this section |
| |
applies to the foreign state for the purpose of giving effect to |
| 30 |
a reciprocal arrangement with that state, and |
| |
(b) | the officer or employee meets conditions A to C. |
| |
(2) | Condition A is that the officer or employee is not— |
| |
| |
(b) | a British overseas territories citizen, |
| 35 |
(c) | a British National (Overseas), or |
| |
(d) | a British Overseas citizen. |
| |
(3) | Condition B is that the officer or employee is not engaged in any |
| |
trade, profession, vocation or employment in the United Kingdom, |
| |
otherwise than as a consular officer or employee of the state in |
| 40 |
| |
(4) | Condition C is that the officer or employee— |
| |
(a) | is a permanent employee of that state, or |
| |
|
| |
|