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Income Tax Bill


Income Tax Bill
Part 14 — Deduction of income tax at source
Chapter 18 — Other regimes involving the deduction of income tax at source

445

 

(3)   

Regulations made by the Treasury may provide, in relation to a transfer to

which section 899 applies, that for the purposes of the Tax Acts the value of

what is transferred is to be calculated in accordance with prescribed rules.

(4)   

In particular, rules may include provision—

(a)   

for the calculation of an amount representing the actual value of what

5

is transferred,

(b)   

for that amount to be treated as a net amount corresponding to a gross

amount from which income tax at the basic rate has been deducted, and

(c)   

for the gross amount to be taken to be the value of what is transferred.

901     

Treatment of sums representing income tax

10

(1)   

This section applies if, in accordance with section 899(3) or (4), a person pays a

sum to the Commissioners for Her Majesty’s Revenue and Customs.

(2)   

The sum is treated as paid on account of a liability of another person to income

tax or corporation tax.

(3)   

The liability and the other person are to be found in accordance with

15

prescribed rules.

(4)   

If the sum exceeds the liability concerned, the Commissioners must pay so

much of the sum as is appropriate to the other person.

(5)   

If no liability is found, the Commissioners must pay the sum to the recipient of

the relevant payment or transfer.

20

(6)   

The relevant payment or transfer is the payment or transfer—

(a)   

to which section 899 applies, and

(b)   

which gave rise to the payment of the sum.

(7)   

A reference to a sum in this section does not include anything representing

interest.

25

902     

Regulations

(1)   

The Treasury may by regulations—

(a)   

make provision enabling the Commissioners for Her Majesty’s

Revenue and Customs to serve notices requiring persons who make

payments or transfers to which section 899 applies to give them

30

prescribed information in respect of such payments or transfers,

(b)   

make provision requiring persons who make payments or transfers to

which section 899 applies to make, at prescribed times and for

prescribed periods, returns to the Commissioners containing

prescribed information about payments or transfers and the income tax

35

for which those persons are accountable in respect of them,

(c)   

make provision for the collection and recovery of such income tax, for

assessments and claims to be made in respect of it, and for the payment

of interest on it, and

(d)   

adapt, or modify the effect of, any enactment relating to income tax for

40

the purpose of making any provision mentioned in paragraphs (a) to

(c).

 
 

Income Tax Bill
Part 14 — Deduction of income tax at source
Chapter 18 — Other regimes involving the deduction of income tax at source

446

 

(2)   

The Treasury may also by regulations make provision generally for giving

effect to this section and sections 899 to 901 (including different provision for

different cases or descriptions of case).

903     

Supplementary

(1)   

For the purposes of the Tax Acts a payment to which section 899 applies is

5

treated as if it were not reduced by the deduction of a sum representing income

tax under that section.

(2)   

An officer of Revenue and Customs may disclose, to any person who appears

to the officer to have an interest in the matter, information relevant to

determining whether section 899 applies to a payment or transfer.

10

(3)   

An officer is not precluded from doing so by any obligation as to secrecy

imposed by statute or otherwise.

(4)   

In this section and sections 899 to 902

(a)   

references to a payment include references to a payment by way of loan

of money, and

15

(b)   

references to a transfer do not include references to a transfer of money

but, subject to that, include references to—

(i)   

a temporary transfer (as by way of loan), and

(ii)   

a transfer of a right (whether or not a right to receive money).

(5)   

In sections 899 to 902 “prescribed” means prescribed by regulations made by

20

the Treasury.

Non-resident landlords

904     

Income tax due in respect of income of non-resident landlords

(1)   

The Commissioners for Her Majesty’s Revenue and Customs may by

regulations make provision for—

25

(a)   

the collection, from non-resident landlord representatives of a

prescribed description, of prescribed amounts of income tax in respect

of non-resident landlord income, and

(b)   

the assessment and recovery of the income tax on or from such persons.

(2)   

“Non-resident landlord income” means income of a person whose usual place

30

of abode is outside the United Kingdom (“the non-resident”) and which is or

may become chargeable—

(a)   

under Schedule A, or

(b)   

as the profits of a UK property business under Chapter 3 of Part 3 of

ITTOIA 2005.

35

(3)   

“Non-resident landlord representative” means—

(a)   

a person by whom any sums are payable to the non-resident which are

to be treated as receipts of a Schedule A business, or a UK property

business, carried on by the non-resident, or

(b)   

a person who acts on behalf of the non-resident in connection with the

40

management or administration of any such business.

 
 

Income Tax Bill
Part 14 — Deduction of income tax at source
Chapter 18 — Other regimes involving the deduction of income tax at source

447

 

(4)   

A non-resident landlord representative who must pay prescribed amounts of

income tax to the Commissioners for Her Majesty’s Revenue and Customs

under regulations under this section is entitled—

(a)   

to be indemnified by the non-resident for all such payments, and

(b)   

to retain out of any sums otherwise due from the representative to the

5

non-resident, or received by the representative on behalf of the non-

resident, sums representing income tax sufficient for meeting any

liabilities under the regulations to make such payments.

(5)   

Subsection (4)(b) applies whether the liability is one which the representative

has discharged or to which the representative is subject.

10

905     

Regulations under section 904

(1)   

Regulations under section 904 may, in particular, include all or any of the

following provisions—

(a)   

provision for the amount of any income tax in respect of non-resident

landlord income, which is to be paid to the Commissioners for Her

15

Majesty’s Revenue and Customs, to be calculated by reference to

prescribed factors,

(b)   

provision for the determination in accordance with the regulations of

the period for which, the circumstances in which and the times at which

any payments are to be made to the Commissioners,

20

(c)   

provision for requiring the payment of interest on amounts which are

not paid to the Commissioners at the times required under the

regulations,

(d)   

provision as to the certificates to be given in prescribed circumstances

to the non-resident by a non-resident landlord representative, and as to

25

the particulars to be included in any such certificate,

(e)   

provision for the making of repayments of income tax to the non-

resident and for such repayments to be made in prescribed cases to

non-resident landlord representatives,

(f)   

provision for the payment of interest by the Commissioners on sums

30

repaid under the regulations,

(g)   

provision for the rights and obligations arising under the regulations to

depend on the giving of such notices and the making of such claims and

determinations as may be prescribed,

(h)   

provision for the making and determination of applications for

35

requirements of the regulations not to apply in certain cases, and for the

variation or revocation, in prescribed cases, of the determinations made

on such applications,

(i)   

provision for appeals with respect to questions arising under the

regulations,

40

(j)   

provision requiring non-resident landlord representatives within

section 904(3)(b) who are of a prescribed description to register with the

Commissioners,

(k)   

provision requiring persons registered with the Commissioners and

other non-resident landlord representatives of a prescribed description

45

to make returns and supply prescribed information to the

Commissioners and to make available prescribed books, documents

and other records for inspection on behalf of the Commissioners,

(l)   

provision for the partnership, as such, to be treated as the non-resident

landlord representative if a liability to make a payment under the

50

 
 

Income Tax Bill
Part 14 — Deduction of income tax at source
Chapter 18 — Other regimes involving the deduction of income tax at source

448

 

regulations arises from amounts payable or things done in the course

of a business carried on by persons in partnership, and

(m)   

provision which, in relation to payments of income tax to be made by

virtue of section 904 or to sums retained in respect of such payments,

applies (with or without modifications) any enactment or subordinate

5

legislation having effect apart from section 904 with respect to cases in

which tax is or is treated as deducted from any income.

(2)   

Interest required to be paid by regulations under section 904 is to be paid

without deduction of a sum representing income tax and is not to be taken into

account in calculating any income, profits or losses for any tax purposes.

10

(3)   

Regulations under section 904 may—

(a)   

make different provision for different cases, and

(b)   

contain incidental, supplemental, consequential and transitional

provision and savings.

(4)   

Provision made by virtue of subsection (3)(b) may, in particular, in connection

15

with any other provision made by regulations under section 904, modify the

operation in any case of section 59A of TMA 1970 (payments on account of

income tax).

(5)   

In this section and section 904 “prescribed” means prescribed by, or

determined by an officer of Revenue and Customs in accordance with,

20

regulations made by the Commissioners for Her Majesty’s Revenue and

Customs under section 904.

(6)   

See section 121(2)(c) of FA 2006 which prevents certain distributions of Real

Estate Investment Trusts being non-resident landlord income for the purposes

of regulations under section 904.

25

Real Estate Investment Trusts

906     

Income tax due in respect of distributions

(1)   

The Treasury may make regulations providing for the assessment, collection

and recovery of income tax where—

(a)   

a distribution to which subsection (2) or (3) applies is made, and

30

(b)   

tax is or may become chargeable in respect of the distribution (whether

by virtue of section 121(1) of FA 2006 (distributions: liability to tax) or

otherwise).

(2)   

This subsection applies to a distribution if—

(a)   

it is made by a company to which Part 4 of FA 2006 applies (Real Estate

35

Investment Trusts), and

(b)   

it is a distribution of profits or gains (or of both) of C (tax-exempt).

(3)   

This subsection applies to a distribution if—

(a)   

it is made by the principal company of a group to which Part 4 of FA

2006 applies, and

40

(b)   

it is a distribution of amounts shown in the financial statements of G

(property rental business) as—

(i)   

profits and gains of UK resident members of the group, or

(ii)   

profits and gains of the property rental business in the United

Kingdom of non-UK resident members of the group.

45

 
 

Income Tax Bill
Part 14 — Deduction of income tax at source
Chapter 18 — Other regimes involving the deduction of income tax at source

449

 

(4)   

In this section—

“C (tax-exempt)” has the meaning given by section 105(3)(b) of FA 2006,

“G (property rental business)” has the meaning given by paragraph 2 of

Schedule 17 to that Act,

“group” and “principal company” have the meanings given by section 134

5

of that Act,

“property rental business” has the meaning given by section 104 of that

Act (read with paragraph 32(2) of Schedule 17 to that Act).

(5)   

References in this section to a UK resident company have the same meaning as

in Schedule 17 to FA 2006 (see paragraph 3(1) of that Schedule).

10

(6)   

In this section “gains” includes chargeable gains.

907     

Regulations under section 906

(1)   

Regulations under section 906 may, in particular—

(a)   

require a company to deduct sums representing income tax at the basic

rate before payment of distributions,

15

(b)   

specify classes of shareholder to whom distributions may be made

without deduction of such sums,

(c)   

make provision about the calculation of the sums to be deducted by a

company,

(d)   

require a company to account for income tax equal to the sums

20

deducted,

(e)   

apply an enactment (with or without modification) in respect of cases

where a sum representing income tax is deducted or treated as

deducted from income,

(f)   

specify the time at which a distribution is to be treated as made by a

25

company,

(g)   

specify periods in respect of which payments of income tax are to be

made,

(h)   

specify times at which payments of income tax are to be made,

(i)   

make provision about the making of claims and determinations in

30

respect of over-payment or under-payment (which may include

provision for appeals),

(j)   

include provision requiring the payment of interest in respect of late

payments of income tax (which may—

(i)   

provide for payment without deduction of sums representing

35

income tax,

(ii)   

allow interest paid as a deduction from profits of the company’s

tax-exempt business),

(k)   

require a company to provide a shareholder with a statement in writing

containing specified information,

40

(l)   

make provision about the repayment to a shareholder of sums

deducted and paid to the Commissioners for Her Majesty’s Revenue

and Customs in respect of income tax,

(m)   

make provision for the payment of interest in respect of repayments

under paragraph (l),

45

(n)   

require notices to be given by or to a company,

(o)   

require a company to make returns, and

 
 

Income Tax Bill
Part 14 — Deduction of income tax at source
Chapter 19 — General

450

 

(p)   

require a company to make records available to the Commissioners for

Her Majesty’s Revenue and Customs for inspection.

(2)   

A reference in subsection (1) to a distribution in respect of profits of tax-exempt

business includes a distribution made after Part 4 of FA 2006 has ceased to

apply to a company.

5

(3)   

A distribution which is treated as having been made by virtue of section

107(9)(b) of FA 2006 is also to be treated as having been made for the purposes

of regulations under section 906.

(4)   

Regulations under section 906

(a)   

may make provision which applies generally or only in specified cases

10

or circumstances,

(b)   

may make different provision for different cases or circumstances, and

(c)   

may contain incidental, supplemental, consequential and transitional

provision and savings.

(5)   

In subsections (1) and (2), so far as they apply to cases within section 906(1)(a),

15

“profits” includes gains (including chargeable gains).

(6)   

In this section “tax-exempt business” has same meaning as in Part 4 of FA 2006

(see section 107(2) of that Act).

Chapter 19

General

20

Supplementary

908     

Statements about deduction of income tax

(1)   

Subsection (2) applies if a person makes a payment from which a sum

representing income tax must be deducted under any provision of Chapters 2

to 7 or under section 852 or 861.

25

(2)   

If the recipient requests it in writing, the person must provide the recipient

with a statement showing—

(a)   

the gross amount of the payment,

(b)   

the amount of the sum deducted, and

(c)   

the actual amount paid.

30

(3)   

Subsection (4) applies if the trustees of an unauthorised unit trust are treated

as making a deemed payment to a unit holder (“U”).

(4)   

If U requests it in writing, the trustees must provide U with a statement

showing—

(a)   

the gross amount of the payment,

35

(b)   

the amount of the deemed deduction from the payment, and

(c)   

the amount of the payment after the deemed deduction.

(5)   

A statement under this section must be in writing.

(6)   

The duty to comply with a request under subsection (2) or (4) is enforceable by

the recipient or U (as the case may be).

40

 
 

Income Tax Bill
Part 14 — Deduction of income tax at source
Chapter 19 — General

451

 

(7)   

In this section “deemed deduction”, “deemed payment” and “the gross

amount” have the same meanings as in Chapter 13 (see section 874(6)).

909     

Arrangements for payments of interest less tax or at specified net rate

(1)   

This section applies if—

(a)   

provision is made for the payment of interest, and

5

(b)   

the interest is payable without deduction of a sum representing income

tax.

(2)   

It applies—

(a)   

whenever the provision was made, and

(b)   

whether it was made orally or in writing.

10

(3)   

If the provision is for the payment of interest “less tax” (or uses words to similar

effect) it is to be read as if the words “less tax” (or the equivalent words) were

not included.

(4)   

Subsection (5) applies if the provision is (however worded)—

(a)   

for the payment of interest to which subsection (6) applies, and

15

(b)   

for that interest to be paid at such a rate (“the gross rate”) that the

amount of interest payable at that rate is, after deduction of a sum

representing income tax, equal to the amount of interest payable at a

specified rate (“the net rate”).

(5)   

In that case the provision is to be read as if it were for the payment of interest

20

at the gross rate.

(6)   

This subsection applies to—

(a)   

interest on which the recipient is chargeable to income tax, which falls

within Chapter 2 of Part 4 of ITTOIA 2005 but which is not relevant

foreign income, or

25

(b)   

interest on which the recipient is chargeable to corporation tax under

Case III of Schedule D.

910     

Payments to companies

(1)   

The provisions of this Part relating to the deduction from payments of sums

representing income tax are not affected by the fact that the recipient is a

30

company not chargeable to income tax on the payment.

(2)   

References in subsection (1) to payments received by a company—

(a)   

include payments received by another person on behalf of or in trust for

the company, but

(b)   

do not include payments received by the company on behalf of or in

35

trust for another person.

(3)   

For further provision about payments received by companies, see—

(a)   

sections 7(2) and 11(3) of ICTA (set-off of income tax deducted at source

against liability to corporation tax), and

(b)   

section 885 (set-off of income tax suffered against income tax payable

40

under Chapter 15).

 
 

 
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