|
| |
|
section applies with the substitution for subsection (4) of— |
| |
“(4) | In subsection (3) a child’s “relevant settlement income” means |
| |
income which (apart from that subsection) would be treated as |
| |
income of the settlor under subsection (1) and which— |
| |
(a) | so far as consisting of such income as is mentioned in |
| 5 |
paragraph 133 of Schedule 2, is income paid to or for the |
| |
benefit of the child, and |
| |
(b) | so far as consisting of other income, is income paid to or for |
| |
the benefit of, or otherwise treated as income of, the child.” |
| |
(4) | Any apportionment required for the purposes of sub-paragraph (1)(b) is to |
| 10 |
be made on a just and reasonable basis. |
| |
Amounts treated as income of settlor: capital sums paid to settlor by trustees of settlement |
| |
134 (1) | In relation to any case which involves any previous tax years before 1995-96, |
| |
subsection (3) of section 635 applies in accordance with sub-paragraphs (2) |
| |
| 15 |
(2) | So far as that subsection applies in relation to those previous tax years, for |
| |
paragraph (c) substitute— |
| |
“(c) | so much of any income arising under the settlement in any |
| |
previous year which has not been distributed as is shown to |
| |
consist of income which has been treated as income of the |
| 20 |
settlor by virtue of section 671, 672, 674, 674A or 683 of ICTA, |
| |
(d) | any income arising under the settlement in any previous year |
| |
which has been treated as the income of the settlor by virtue |
| |
| |
(e) | any sums paid by virtue or in consequence of the settlement, |
| 25 |
to the extent that they are not allowable, by virtue of section |
| |
676 of ICTA, as deductions in computing the settlor's income |
| |
| |
(f) | any sums paid by virtue or in consequence of the settlement |
| |
in any previous year which have been treated as the income |
| 30 |
of the settlor by virtue of section 664(2)(b) of ICTA, |
| |
(g) | any sums included in the income arising under the settlement |
| |
as amounts which have been or could have been apportioned |
| |
to a beneficiary as mentioned in section 681(1)(b) of ICTA, |
| |
| 35 |
(3) | For paragraph (d) of that subsection substitute— |
| |
“(h) | an amount equal to the sum of tax at the rate applicable to |
| |
| |
(i) | the total amount of income arising under the |
| |
settlement in that year and any previous year which |
| 40 |
has not been distributed, less |
| |
(ii) | the total amount of the income and sums referred to |
| |
in paragraph (c) (in relation to tax years 1995-96 |
| |
onwards) and paragraphs (c), (d), (e), (f) and (g) as |
| |
substituted by paragraph 134 of Schedule 2 (in |
| 45 |
relation to tax years before 1995-96).” |
| |
|
| |
|
| |
|
(4) | In relation to any sum paid before 6th April 1995, subsection (3) of section |
| |
634 applies with the substitution of “in one of the events specified in section |
| |
673(3) of ICTA” for paragraphs (a) and (b). |
| |
(5) | Subsection (5)(a) of section 634 does not apply if the direction or assignment |
| |
was given or made before 6th April 1981. |
| 5 |
Amounts treated as income of settlor: capital sums paid to settlor by body connected with |
| |
| |
135 | In relation to any capital sum paid to the settlor before tax year 1995-96, |
| |
section 641 applies with the insertion after subsection (6) of— |
| |
“(6A) | Where a capital sum is paid to the settlor in a tax year by a body |
| 10 |
corporate connected with the settlement in that year it is to be |
| |
assumed until the contrary is shown that an associated payment of |
| |
an amount not less than that of the capital sum has been made to that |
| |
body by the trustees of the settlement.” |
| |
Beneficiaries’ income from estates in administration: basic amounts |
| 15 |
136 (1) | Sub-paragraph (2) applies if any previous tax year to which regard is to be |
| |
had for the purposes of section 665 (assumed income entitlement) is a tax |
| |
year before 2005-06 (an “old tax year”). |
| |
(2) | In relation to the old tax year, the reference in step 4 in subsection (1) of that |
| |
section to basic amounts relating to the person’s absolute interest in respect |
| 20 |
of which the person is liable to income tax for that year is to be taken as a |
| |
reference to the amount deemed to have been paid to that person as income |
| |
for that year in respect of that interest by virtue of section 696 of ICTA. |
| |
(3) | Sub-paragraph (4) applies if one or more of the absolute interests referred to |
| |
in section 671(1) (successive absolute interests) was held in one or more old |
| 25 |
| |
(4) | The reference in section 671(2)(b) to the basic amounts relating to any |
| |
previous such interest includes a reference to the amounts deemed to have |
| |
been paid to the previous holder as income for the old tax years in respect of |
| |
that interest by virtue of section 696 of ICTA. |
| 30 |
(5) | Sub-paragraph (6) applies if any of the limited interests referred to in section |
| |
672(1)(d) (successive interests: assumed income entitlement of holder of |
| |
absolute interest following limited interest) was held in one or more old tax |
| |
| |
(6) | The reference in section 672(4) to the basic amounts relating to any previous |
| 35 |
such interest includes a reference to the amounts deemed to have been paid |
| |
to the holders of any such interests as income for the old tax years in respect |
| |
of those interests by virtue of section 695 of ICTA. |
| |
(7) | In the case of a UK estate, references in this paragraph to the amounts |
| |
deemed to have been paid are references to the amounts that would be |
| 40 |
deemed to have been paid apart from sections 695(4)(a) and 696(4) of ICTA |
| |
| |
|
| |
|
| |
|
Beneficiaries’ income from estates in administration: income treated as bearing income tax |
| |
137 | A sum treated as part of the aggregate income of an estate by virtue of |
| |
section 547(1)(c) of ICTA (gains from life insurance contracts etc.) as the |
| |
result of an event that occurred before 6th April 2004 is treated for the |
| |
purposes mentioned in section 680 of this Act as bearing income tax at the |
| 5 |
| |
| |
| |
Ulster savings certificates |
| |
138 | In the case of certificates acquired before 27th July 1981, section 693(5) |
| 10 |
applies with the substitution for “the Department of Finance and Personnel” |
| |
| |
| |
139 | Any scheme which was certified as mentioned in section 326(2)(c), (3)(b) or |
| |
(4)(b) of ICTA before 1st December 1994 is treated as a certified SAYE |
| 15 |
savings arrangement for the purposes of Chapter 4 of Part 6 of this Act. |
| |
140 | A European authorised institution arrangement is not an institutional |
| |
arrangement for the purposes of Chapter 4 of Part 6 if the arrangement was |
| |
established before 2nd May 1995. |
| |
| 20 |
(a) | the Treasury specification rules, nor |
| |
(b) | the Treasury authorisation rules, |
| |
| apply to any scheme which was certified as mentioned in section 326(3)(b), |
| |
(4)(b) or (5)(b) of ICTA before 31st July 1995. |
| |
(2) | In sub-paragraph (1)— |
| 25 |
“the Treasury specification rules” means sections 705(1)(b) and (2) to (4) |
| |
| |
“the Treasury authorisation rules” means sections 707 and 708 of this |
| |
| |
Venture capital trust dividends: shares acquired before the tax year 2004-05 |
| 30 |
142 | In the case of dividends paid in respect of shares acquired before the tax year |
| |
2004-05, Chapter 5 of Part 6 (venture capital trust dividends) applies as if the |
| |
references in section 709(4) (annual acquisition limit) to £200,000 were |
| |
| |
Purchased life annuity payments: old determinations concerning capital elements |
| 35 |
143 (1) | Any determination in relation to an annuity as to the amount of the capital |
| |
element that was made under Chapter 5 of Part 14 of ICTA before 6th April |
| |
2005 and any decision on appeal that was so made against such a |
| |
determination have effect on and after that date, so far as is required for the |
| |
purposes of this Act, as a determination or decision as to the extent to which |
| 40 |
annuity payments made under the annuity are within section 717(1) |
| |
|
| |
|
| |
|
(exemption for part of purchased life annuity payments) in accordance with |
| |
section 719 (extent of exemption under that section). |
| |
(2) | And a notification of such a determination or appeal or of an alteration of |
| |
such a determination has effect accordingly. |
| |
Purchased life annuity payments: carry forward of excess capital elements |
| 5 |
144 (1) | This paragraph applies if, in the case of an annuity to which section 656(2) of |
| |
ICTA applied immediately before 6th April 2005, the total of the amounts |
| |
determined in accordance with that section to be capital elements in respect |
| |
of the annuity payments that arose before that date (and accordingly not to |
| |
be annual payments for income tax purposes) exceeded the total of those |
| 10 |
| |
(2) | The amount of the excess is to be added to the fixed sum mentioned in |
| |
section 719(4) for the first payment that arises after 5th April 2005. |
| |
Purchased life annuity payments: penalty for false statements |
| |
145 (1) | Section 723(7) (liability to penalty for false statements and representations to |
| 15 |
obtain exemption under Chapter 7 of Part 6) does not apply (and section |
| |
658(5) of ICTA continues to apply) to any statement or representation made |
| |
before 6th April 2005, despite the fact that it relates to the tax year 2005-06 or |
| |
| |
(2) | Section 723(7) (liability to penalty for false statements and representations to |
| 20 |
obtain exemption under Chapter 7 of Part 6) applies (and section 658(5) of |
| |
ICTA does not apply) to any statement or representation made on or after |
| |
6th April 2005, despite the fact that it relates to a tax year before the tax year |
| |
| |
Certain annual payments by individuals |
| 25 |
146 (1) | Sections 727 (exemption for certain annual payments by individuals) and |
| |
730 (exemption for foreign maintenance payments) do not apply to— |
| |
(a) | any payment falling due before 16th March 1988, or |
| |
(b) | any payment falling due on or after that date but before 6th April |
| |
2000 to which this paragraph applies. |
| 30 |
(2) | Paragraph (b) of sub-paragraph (1) applies to a payment made in pursuance |
| |
of an existing obligation (within the meaning of section 36(3) of FA 1988) |
| |
unless it meets any of conditions A to E. |
| |
(3) | Condition A is that the payment is treated as income of the payer under |
| |
Chapter 5 of Part 5 as a result of section 624 or 629. |
| 35 |
(4) | Condition B is that the payment fell due from a husband to a wife or a wife |
| |
to a husband at a time after 5th April 1990 when they were living together. |
| |
(5) | Condition C is that an election is duly made under section 39 of FA 1988 in |
| |
| |
(6) | Condition D is that the payment fell due on or after 6th April 1994 and is |
| 40 |
| |
(a) | in pursuance of an obligation within section 36(4)(a) to (c) of FA 1988 |
| |
that is an obligation under— |
| |
|
| |
|
| |
|
(i) | an order made by a court, |
| |
(ii) | a written or oral agreement, or |
| |
(iii) | a deed executed for giving effect to an agreement, and |
| |
(b) | for the benefit, maintenance or education of a person (whether or not |
| |
the person to whom the payment is made) who attained the age of 21 |
| 5 |
on or before the day on which the payment fell due but after 5th |
| |
| |
| |
(a) | the payment is made in pursuance of an obligation within section |
| |
36(4)(a) of FA 1988 (existing obligations under certain court orders), |
| 10 |
(b) | the payment is made for the benefit, maintenance or education of a |
| |
person (whether or not the person to whom the payment is made) |
| |
who attained the age of 21 before 6th April 1994, and |
| |
(c) | section 38 of FA 1988 (treatment of certain maintenance payments |
| |
under existing obligations) does not apply to the payment. |
| 15 |
Annual payments for non-taxable consideration |
| |
147 | Section 729 (exemption for payments for non-taxable consideration) applies |
| |
in the case of an annuity granted before 30th March 1977— |
| |
(a) | with the substitution in subsection (1) of “condition B, C or D” for |
| |
| 20 |
(b) | with the substitution of the following subsections for subsection |
| |
| |
“(5) | Condition D is that the payment is a payment under an |
| |
annuity charged on an interest in settled property and |
| |
granted by an individual to a company— |
| 25 |
(a) | whose business then consisted wholly or mainly in |
| |
the acquisition of interests in settled property, or |
| |
(b) | which was then carrying on life assurance business in |
| |
| |
(6) | In the application of subsections (4) and (5) to Scotland, the |
| 30 |
references in those subsections to settled property are to be |
| |
read as references to property held in trust.” |
| |
Periodical payments of personal injury damages etc. |
| |
148 (1) | Subject to sub-paragraphs (4) and (5), sections 731, 733 and 734 apply with |
| |
the modifications in sub-paragraphs (2) and (3). |
| 35 |
(2) | In section 731 (periodical payments of personal injury damages)— |
| |
(a) | for subsection (2) substitute— |
| |
“(2) | This subsection applies to periodical payments made in |
| |
| |
(a) | a court order making a final or interim award of |
| 40 |
damages in respect of personal injury, |
| |
(b) | an agreement settling a claim or action for such |
| |
| |
(c) | an agreement for a payment on account of the |
| |
damages that may be awarded in such an action.”, |
| 45 |
|
| |
|
| |
|
(b) | in subsection (3)(b) for the words from “agreement” to the end of the |
| |
paragraph substitute “or agreement as is mentioned in subsection (2) |
| |
or a subsequent agreement”, and |
| |
| |
(3) | In sections 733(a) and 734(1)(a)(i) for “agreement, undertaking” substitute |
| 5 |
| |
(4) | The modifications in sub-paragraphs (2) and (3) do not apply if an order has |
| |
been made under section 110(1) of the Courts Act 2003 (c. 39) |
| |
(commencement) making provision for section 100(2) and (3) of that Act to |
| |
come into force on a day earlier than 6th April 2005. |
| 10 |
(5) | The power in section 110(1) of that Act includes power to make provision in |
| |
accordance with which the modifications in sub-paragraphs (2) and (3) do |
| |
not apply on or after a day appointed by the order that is later than 5th April |
| |
| |
| 15 |
| |
149 (1) | This paragraph applies if— |
| |
(a) | a disposal event is treated as occurring in relation to an individual |
| |
under paragraph 17(2) of Schedule 36 to FA 2003 (foster-care relief: |
| |
| 20 |
(b) | the individual is a relevant individual for the tax year 2004-05, |
| |
(c) | the individual has a chargeable period which corresponds to the |
| |
income period for the individual’s foster-care receipts in that tax |
| |
year (and therefore the chargeable period is a relevant chargeable |
| |
| 25 |
(d) | the next chargeable period of the individual is not a relevant |
| |
| |
(2) | Subsection (4) of section 825 applies (despite anything in subsection (1) of |
| |
that section to the contrary) as if the reference to the first subsequent |
| |
chargeable period which is not a relevant chargeable period were to the |
| 30 |
period mentioned in sub-paragraph (1)(d). |
| |
| |
Foreign income: special rules |
| |
Relevant foreign income charged on remittance basis: income arising before the tax year 2005- |
| |
| 35 |
150 | A claim may be made under section 831 (claim for relevant foreign income |
| |
to be charged on the remittance basis) for relevant foreign income to be |
| |
charged in accordance with section 832 for the tax year 2005-06 or any later |
| |
tax year, despite that income having arisen in a tax year before the tax year |
| |
2005-06; and sections 832 to 834 apply accordingly. |
| 40 |
Relevant foreign income charged on remittance basis: delayed remittances |
| |
151 (1) | The fact that income arose in a tax year before 2005-06 does not prevent— |
| |
|
| |
|
| |
|
(a) | a claim being made in respect of it under section 835(1) (relief for |
| |
| |
(b) | section 835(5) applying as respects the tax year in which the income |
| |
| |
(2) | But sub-paragraphs (3) to (5) apply if— |
| 5 |
(a) | such a claim is made in respect of any income (“the delayed |
| |
| |
(b) | the delayed income arose in the tax year 1996-97 or an earlier tax |
| |
| |
(c) | the basis year for that year is a different year, and |
| 10 |
(d) | that basis year is not the basis year for two tax years. |
| |
(3) | Section 835(5) does not apply and the delayed income is to be treated as if it |
| |
were income received in the United Kingdom in that basis year. |
| |
(4) | In this paragraph “basis year”, in relation to tax chargeable for any tax year |
| |
in respect of any income, means the year by reference to which the amount |
| 15 |
of the income chargeable finally falls to be calculated. |
| |
(5) | This paragraph does not affect which year is to be taken as the basis year for |
| |
calculating tax chargeable for any tax year. |
| |
Relief for backdated pensions charged on arising basis |
| |
152 | The fact that the earlier year referred to in subsections (1)(b) and (2) of |
| 20 |
section 840 (relief for backdated pensions charged on the arising basis) is a |
| |
tax year before 2005-06 does not prevent— |
| |
(a) | a claim being made under that section, or |
| |
(b) | such adjustments (by way of repayment of tax, assessment or |
| |
otherwise) as are necessary to give effect to that section being made |
| 25 |
as respects such a tax year. |
| |
Unremittable income that arose before the tax year 2005-06 |
| |
153 (1) | A claim may be made under section 842 (claim for relief on unremittable |
| |
income) for the tax year 2005-06 or any later tax year, despite the income |
| |
having arisen in a tax year before 2005-06. |
| 30 |
(2) | Without prejudice to paragraph 4 of this Schedule, section 843 (withdrawal |
| |
of relief) applies for the tax year 2005-06 or any later tax year, despite the |
| |
income having arisen originally in a tax year before the tax year 2005-06 |
| |
(whether the claim in respect of it was made under section 584 of ICTA |
| |
(relief for unremittable overseas income) or section 842 of this Act). |
| 35 |
(3) | Sub-paragraph (4) applies if an appeal against an assessment for the tax year |
| |
2005-06 or a later tax year involves a question as to the operation of section |
| |
584 of ICTA or Chapter 4 of Part 8 of this Act as respects income that arose |
| |
in a tax year before 2005-06. |
| |
(4) | Section 31D of TMA 1970 (appeals: election to bring appeal before Special |
| 40 |
Commissioners) applies with the omission of— |
| |
(a) | paragraph (b) of subsection (2), |
| |
(b) | the word “or” preceding that paragraph, and |
| |
(c) | subsections (3) to (7) (by virtue of which such an election may be |
| |
disregarded if the General Commissioners so direct). |
| 45 |
|
| |
|