|
| |
|
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 extended |
| 10 |
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 treated as |
| 15 |
granted for a term longer than one ending at the earliest date |
| |
on which it could be determined by notice. |
| |
| |
Rule 3: 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 |
| 20 |
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. |
| |
(3) | Rules 2 and 3 apply in accordance with circumstances prevailing at |
| 25 |
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 |
| |
section 281 (sums payable for variation or waiver of term of lease). |
| 30 |
| |
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. |
| |
(2) | In determining whether a reverse premium was one to which the recipient |
| 35 |
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— |
| |
“(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),”, |
| 5 |
(b) | at the end of paragraph (d) insert “and”, and |
| |
(c) | omit paragraph (f) and the word “and” before it. |
| |
| |
(a) | before paragraph (a) insert— |
| |
“(aa) | income regarded as relevant earnings for pension |
| 10 |
purposes under section 623(2)(c) or 644(2)(c) of ICTA, |
| |
| |
(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 |
| 15 |
substituting sections 322(2) and 328(2) of this Act for those subsections as |
| |
amended by sub-paragraphs (2) and (3) above. |
| |
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. |
| |
| 20 |
(a) | after paragraph (a) insert— |
| |
“(ab) | section 623(2)(c) or 644(2)(c) (income regarded as |
| |
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 |
| 25 |
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 |
| |
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 |
| 30 |
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. |
| |
Meaning of “mineral royalties” |
| |
77 | The definition of “mineral royalties” in section 341(2) does not include any |
| 35 |
rent receivable before 6th April 1970. |
| |
|
| |
|
| |
|
| |
Savings and investment income: general |
| |
Open-ended investment companies: saving for powers to make provision corresponding to |
| |
provisions applicable to unit trusts |
| |
78 (1) | Despite the enactment by this Act in the OEIC sections of provisions |
| 5 |
previously contained in regulations made under section 152 of FA 1995, the |
| |
Treasury may continue to make regulations under that section for achieving |
| |
any purpose that could be achieved by such regulations before the coming |
| |
into force of the OEIC sections. |
| |
| 10 |
(a) | regulations under that section may make provision for securing, in |
| |
relation to the matters mentioned in subsection (1)(a) to (c) of that |
| |
section, that the provision made by the OEIC sections corresponds, |
| |
subject to such modifications as the Treasury consider appropriate, |
| |
to the provision made by the enactments mentioned in subsection (2) |
| 15 |
of that section in relation to— |
| |
| |
(ii) | rights under, and the assets subject to, such trusts, and |
| |
(iii) | transactions for purposes connected with such trusts, and |
| |
(b) | that section has effect with such modifications as are required for the |
| 20 |
purposes of this paragraph. |
| |
| |
“the OEIC sections” means— |
| |
(a) | sections 373 to 375 of this Act (under which certain amounts are |
| |
treated as interest paid by open-ended investment companies), |
| 25 |
| |
(b) | sections 386 to 388 of this Act (under which certain amounts are |
| |
treated as dividends paid by open-ended investment |
| |
| |
“unit trust” has the same meaning as in section 152 of FA 1995 (see |
| 30 |
| |
Deeply discounted securities issued in accordance with qualifying earn-out right |
| |
79 | Despite the repeal by this Act of section 104(4) of FA 2002, sections 430(5) |
| |
and 442 (securities issued in accordance with qualifying earn-out right) |
| |
apply whenever the security was issued. |
| 35 |
Deeply discounted securities: deemed transfers of strips on 5th April |
| |
80 (1) | Despite the repeal by this Act of paragraph 14(4) of Schedule 13 to FA 1996, |
| |
a person who was deemed under that paragraph to have transferred a strip |
| |
on 5th April 2005 is treated for the purposes of Chapter 8 of Part 4 (profits |
| |
from deeply discounted securities) as if the person had re-acquired the strip |
| 40 |
under that paragraph on 6th April 2005 for an amount equal to the amount |
| |
for which it was deemed to have been transferred. |
| |
(2) | That Chapter and this Part of this Schedule apply to a deemed transfer and |
| |
reacquisition under that paragraph (including a reacquisition within sub- |
| |
|
| |
|
| |
|
paragraph (1)) as if it were a transfer and reacquisition under section 445(2) |
| |
| |
(3) | Section 452 (power to modify that Chapter for strips) applies as if this |
| |
paragraph were in that Chapter. |
| |
Deeply discounted securities: restriction of profits and losses on strips |
| 5 |
81 (1) | Sections 447 and 448 (restriction of profits and losses on strips by reference |
| |
to original acquisition cost) do not apply to a strip acquired before 15th |
| |
| |
(2) | For the purposes of paragraph (1) any deemed acquisitions under paragraph |
| |
14(4) of Schedule 13 to FA 1996 or section 445(3) of this Act are ignored. |
| 10 |
Deeply discounted securities: saving for charities’ losses |
| |
82 | The references in section 454(4) and (5) to trustees include any person who, |
| |
had the loss been a profit— |
| |
(a) | would have been eligible for relief from tax for the tax year in which |
| |
the loss is sustained as a result of section 505(1) of ICTA (exemption |
| 15 |
from income tax for certain income forming part of the income of a |
| |
| |
(b) | would have been so eligible but for section 505(3) of that Act (income |
| |
that is not exempt in some circumstances for charities incurring non- |
| |
| 20 |
Deeply discounted securities: saving for pension trustees’ losses |
| |
83 | The references in section 454(4) and (5) to trustees include any person who, |
| |
had the loss been a profit, would have been eligible for relief from tax for the |
| |
tax year in which the loss is sustained as a result of— |
| |
(a) | section 592(2) of ICTA (exemption from income tax for income from |
| 25 |
investments or deposit held for exempt approved pension schemes), |
| |
(b) | section 608(2)(a) of ICTA (corresponding exemption for |
| |
superannuation funds approved before 6th April 1980), |
| |
(c) | section 613(4) of ICTA (corresponding exemption for parliamentary |
| |
| 30 |
(d) | section 614(2), (3), (4) or (5) of ICTA (corresponding exemption for |
| |
certain overseas pension funds), |
| |
(e) | section 620(6) of ICTA (corresponding exemption for retirement |
| |
| |
(f) | section 643(2) of ICTA (corresponding exemption for approved |
| 35 |
personal pension schemes). |
| |
Exclusion of deeply discounted securities from section 711 to 728 of ICTA (accrued income |
| |
| |
84 | Securities only fall within paragraph (f) of section 710(3) of ICTA (meaning |
| |
of “securities” for purposes of sections 711 to 728), as substituted by |
| 40 |
Schedule 1 to this Act, if the disposal of the securities on or after 6th April |
| |
2005 would be a disposal of deeply discounted securities for the purposes of |
| |
Chapter 8 of Part 4 of this Act. |
| |
|
| |
|
| |
|
Gains from contracts for life insurance etc: foreign policies of life insurance |
| |
85 (1) | This paragraph modifies the application of— |
| |
(a) | section 474(4) (foreign policies of life insurance which are not |
| |
| |
(b) | section 531(6) (foreign policies of life insurance to which section 530 |
| 5 |
| |
(c) | section 532 (relief for policies and contracts with European Area |
| |
| |
| in relation to a policy of life insurance which meets conditions A and B. |
| |
(2) | Condition A is that the policy is a foreign policy of life insurance by virtue |
| 10 |
of paragraph (a) of the definition of that term in section 476(3). |
| |
(3) | Condition B is that the income of the company which issued the policy was |
| |
charged to corporation tax under section 445 of ICTA for an accounting |
| |
period ending on or after the day on which the policy was issued. |
| |
(4) | The policy is treated as having been a qualifying policy for any part of the |
| 15 |
| |
(a) | it would have been treated as a qualifying policy apart from section |
| |
| |
(b) | the conditions in either sub-paragraph (3) or sub-paragraph (4) of |
| |
paragraph 24 of Schedule 15 to ICTA (as it then had effect) were met. |
| 20 |
(5) | The policy meets condition B in section 531(6) if— |
| |
(a) | the conditions in either sub-paragraph (3) or sub-paragraph (4) of |
| |
paragraph 24 of Schedule 15 to ICTA (as it then had effect) were met |
| |
throughout the chargeable period, and |
| |
(b) | the conditions in sub-paragraph (3) of that paragraph are met |
| 25 |
| |
(i) | beginning immediately after the end of the chargeable |
| |
| |
(ii) | ending with the date on which the gains mentioned in section |
| |
| 30 |
(6) | Despite the definition of “policy period” in section 532(5), for the purposes |
| |
of determining whether conditions A to C in that section have been met in |
| |
relation to the policy or contract throughout the policy period, that period is |
| |
to be taken not to include— |
| |
(a) | any part of the chargeable period when the conditions in either sub- |
| 35 |
paragraph (3) or sub-paragraph (4) of paragraph 24 of Schedule 15 to |
| |
ICTA (as it then had effect) were met, and |
| |
(b) | any subsequent period when the conditions in sub-paragraph (3) of |
| |
| |
(7) | In this paragraph “the chargeable period” means the period— |
| 40 |
(a) | beginning with the date on which the policy was issued, and |
| |
(b) | ending with the last day of the last accounting period for which the |
| |
company which issued the policy was liable to tax under section 445 |
| |
| |
|
| |
|
| |
|
Gains from contracts for life insurance etc: exclusion of pension policies |
| |
86 (1) | Subject to sub-paragraph (4), before 6th April 2006 Chapter 9 of Part 4 |
| |
applies with the following amendments. |
| |
(2) | For section 479 (exclusion of pension policies) substitute— |
| |
“479 | Exclusion of pension policies |
| 5 |
(1) | This Chapter does not apply to a pension policy. |
| |
(2) | In this section “pension policy” means— |
| |
(a) | a policy of life insurance issued in connection with an |
| |
| |
(b) | a policy of insurance which is, or is evidence of, a contract for |
| 10 |
the time being approved under section 621 of ICTA (contracts |
| |
to provide for surviving spouses and dependants), or |
| |
(c) | a policy of life insurance held in connection with an approved |
| |
| |
| 15 |
“approved scheme” has the meaning given by section 612(1) of |
| |
| |
“personal pension scheme” and “approved”, in relation to such |
| |
a scheme, have the meaning given by section 630(1) of ICTA.” |
| |
(3) | In section 486 (exclusion of maturity of capital redemption policies in certain |
| 20 |
circumstances) for “non-registered occupational pension” substitute |
| |
“sponsored superannuation”. |
| |
(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— |
| |
(a) | substituting section 479 of this Act for that section as substituted by |
| 25 |
| |
(b) | substituting “non-registered occupational pension” for “sponsored |
| |
superannuation” in section 486 of this Act. |
| |
Gains from contracts for life insurance etc: rights partially assigned |
| |
87 | Section 505 (assignments involving co-ownership) does not have effect in |
| 30 |
relation to any transaction which— |
| |
(a) | took place in relation to a policy or contract in an insurance year |
| |
beginning on or before 5th April 2001, and |
| |
(b) | would otherwise and by reason only of the application of that section |
| |
fall to be taken into account as an assignment of a part of or a share |
| 35 |
in the rights conferred by the policy or contract in a calculation |
| |
| |
(i) | section 507 (periodic calculations in part surrender and |
| |
| |
(ii) | section 511 (transaction-related calculations in part surrender |
| 40 |
| |
88 (1) | This paragraph applies if a calculation under section 507 or 511 in relation to |
| |
a policy or contract requires account to be taken of any part of or share in the |
| |
rights conferred by the policy or contract which has been assigned for |
| |
|
| |
|