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Income Tax Bill


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

452

 

911     

Application to public departments

(1)   

This Part applies in relation to payments made by public offices and

departments of the Crown except as mentioned in subsection (2).

(2)   

This Part does not apply to payments made by public offices and departments

of—

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(a)   

any country mentioned in Schedule 3 to the British Nationality Act 1981

(c. 61) (which contains a list of Commonwealth countries) or the

Republic of Ireland, or

(b)   

any state or province of a country within paragraph (a).

912     

Designated international organisations: exceptions from duties to deduct

10

(1)   

The Treasury may by order designate for the purposes of this section any

international organisation of which the United Kingdom is a member.

(2)   

The duty to deduct under section 807 (duty to deduct from certain payments

of yearly interest) does not apply to a payment of interest made by—

(a)   

an organisation designated under subsection (1), or

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(b)   

a partnership of which an organisation so designated is a member.

(3)   

None of the duties to deduct under Chapters 6, 7 (deduction from annual

payments, patent royalties and other payments connected with intellectual

property) and 14 (directions for duty to deduct to apply in tax avoidance cases)

apply to a payment made by an organisation designated under subsection (1).

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(4)   

The duties to deduct under sections 852(2) and 855(2) do not apply in a case

where the payer of the manufactured interest or (as the case may be) the

manufactured overseas dividend is an organisation designated under

subsection (1).

913     

Derivative contracts: exception from duties to deduct

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(1)   

Despite the provisions of this Part, a company is not required to deduct a sum

representing income tax from a payment made under a derivative contract to

which this section applies.

(2)   

This section applies to a derivative contract if profits and losses arising from it

are calculated in accordance with Schedule 26 to FA 2002.

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914     

Foreign currency securities etc: exception from duties to deduct

Despite the provisions of this Part there is no duty to deduct a sum

representing income tax from a payment of interest within section 755(1) of

ITTOIA 2005 (interest on foreign currency securities etc owned by non-UK

residents).

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915     

Income tax is calculated by reference to gross amounts

If any provision of this Part requires the deduction from a payment of a sum

representing income tax at a specified rate, the rate is to be applied to the gross

payment, that is to the payment before deduction of a sum representing

income tax under this Part.

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

453

 

Interpretation

916     

Meaning of “deposit”

In this Chapter “deposit” means a sum of money paid on terms which mean

that it will be repaid (with or without interest)—

(a)   

on demand, or

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(b)   

at a time or in circumstances agreed by or on behalf of the person who

pays it and the person who receives it.

917     

Meaning of “financial instrument”

(1)   

In this Part “financial instrument” includes—

(a)   

any money,

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(b)   

any shares or securities,

(c)   

an option, future or contract for differences if its underlying subject-

matter is (or is primarily) one or more financial instruments, and

(d)   

an instrument the underlying subject-matter of which is (or is

primarily) creditworthiness.

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(2)   

For the purposes of subsection (1) if the effect of an instrument depends on an

index or factor, the “underlying” subject-matter of the instrument is the matter

by reference to which the index or factor is determined.

918     

Meaning of “gilt-edged securities”

In this Part “gilt-edged securities” means any securities which—

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(a)   

are gilt-edged securities for the purposes of TCGA 1992 (see Schedule

9 to that Act), or

(b)   

will be such securities on the making of an order under paragraph 1 of

that Schedule, if the making of the order is anticipated in the prospectus

under which the securities were issued.

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919     

Meaning of “qualifying certificate of deposit”

(1)   

In this Part “qualifying certificate of deposit” means a certificate of deposit

under which—

(a)   

the amount payable is at least £50,000, exclusive of interest, and

(b)   

that amount is payable at a specified time within 5 years beginning

30

with the date on which the deposit is made.

(2)   

If an amount is denominated in a foreign currency, subsection (1)(a) has effect

as if it referred to an amount which is at least the equivalent in that currency of

£50,000 at the time the deposit is made.

(3)   

For the meaning of “certificate of deposit”, see section 953.

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920     

Meaning of “qualifying uncertificated eligible debt security unit”

(1)   

In this Part “qualifying uncertificated eligible debt security unit” means an

uncertificated eligible debt security unit under which—

(a)   

the amount payable is at least £50,000, exclusive of interest, and

 
 

Income Tax Bill
Part 15 — Income Tax Acts definitions etc
Chapter 1 — Definitions

454

 

(b)   

that amount is payable at a specified time within 5 years beginning

with the date on which the deposit is made.

(2)   

If an amount is denominated in a foreign currency, subsection (1)(a) has effect

as if it referred to an amount which is at least the equivalent in that currency of

£50,000 at the time the deposit is made.

5

(3)   

In this section “uncertificated eligible debt security unit” means an

uncertificated unit of an eligible debt security where the issue of the unit

corresponds, in accordance with the current terms of issue of the eligible debt

security, to the issue of a certificate of deposit.

(4)   

In subsection (3)—

10

(a)   

“eligible debt security”,

(b)   

“uncertificated” (in relation to a unit), and

(c)   

“unit”,

   

have the meanings given by regulation 3(1) of the Uncertificated Securities

Regulations 2001 (S.I. 2001/3755).

15

(5)   

For the meaning of “certificate of deposit”, see section 953.

921     

Meaning of “quoted Eurobond”

In this Part “quoted Eurobond” means a security, including a share (in

particular any permanent interest bearing share as defined in section 117 of

TCGA 1992), that—

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(a)   

is issued by a company,

(b)   

is listed on a recognised stock exchange, and

(c)   

carries a right to interest.

Part 15

Income Tax Acts definitions etc

25

Chapter 1

Definitions

922     

Overview of Chapter

(1)   

This Chapter contains definitions which apply for the purposes of the Income

Tax Acts, except where, in those Acts, the context otherwise requires.

30

(2)   

To find a definition go first to section 923, which sets out some of the

definitions in full.

(3)   

If a definition is not set out in full in section 923, the section indicates where it

is set out in full.

(4)   

In some cases it is stated that a definition does not apply for the purposes of

35

specified provisions of the Income Tax Acts (see, for example, sections 924(2),

926(3) and 941(4)).

(5)   

And in some cases it is stated that a definition has effect only for the purposes

of specific provisions of the Income Tax Acts (see, for example, sections 925,

927, 929 and 940).

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Income Tax Bill
Part 15 — Income Tax Acts definitions etc
Chapter 1 — Definitions

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923     

The definitions

The following definitions apply for the purposes of the Income Tax Acts—

“Act” has the meaning given by section 924,

“authorised unit trust” is to be read in accordance with section 468(6) to

(9) of ICTA,

5

“bank” is to be read in accordance with section 925,

“basic rate” means the rate of income tax determined in pursuance of

section 6(2),

“basic rate limit” has the meaning given by section 20(2),

“body of persons” means any body politic, corporate or collegiate and any

10

company, fraternity, fellowship or society of persons whether

corporate or not corporate,

“building society” means a building society within the meaning of the

Building Societies Act 1986 (c. 53),

“capital allowance” means any allowance under CAA 2001,

15

“the Capital Allowances Act” means CAA 2001,

“chargeable gain” has the same meaning as in TCGA 1992,

“chargeable period” means an accounting period of a company or a tax

year,

“charity” means a body of persons or trust established for charitable

20

purposes only,

“close company” has the same meaning as in the Corporation Tax Acts

(see sections 414 and 415 of ICTA),

“company” has the meaning given by section 926,

“connected”, in relation to two persons being connected with one another,

25

is to be read in accordance with sections 927 and 928,

“control”, in relation to the control of a body corporate or a partnership, is

to be read in accordance with section 929,

“distribution” has the same meaning as in the Corporation Tax Acts (see

Part 6, and section 418, of ICTA),

30

“dividend income” has the meaning given by section 19,

“dividend ordinary rate” means the rate of income tax specified in section

8(1),

“dividend trust rate” means the rate of income tax specified in section 9(2),

“dividend upper rate” means the rate of income tax specified in section

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8(2),

“farming” has the meaning given by section 930,

“for accounting purposes” has the meaning given by section 931(4),

“forestry” is to be read in accordance with section 930,

“generally accepted accounting practice” has the meaning given by

40

section 931(1) and (3),

“grossing up” is to be read in accordance with section 932,

“higher rate” means the rate of income tax determined in pursuance of

section 6(2),

“international accounting standards” has the meaning given by section

45

931(5),

“local authority” has the meaning given by section 933,

“local authority association” has the meaning given by section 934,

“market gardening” has the meaning given by section 930,

 
 

Income Tax Bill
Part 15 — Income Tax Acts definitions etc
Chapter 1 — Definitions

456

 

“net income” has the meaning given by section 23 (see Step 2 in that

section),

“non-UK resident” means not resident in the United Kingdom (and

references to a non-UK resident or a non-UK resident person are to a

person who is not resident there),

5

“normal self-assessment filing date”, in relation to a tax year, means the 31

January following the tax year,

“notice” means notice in writing or in a form authorised (in relation to the

case in question) by directions under section 118 of FA 1998,

“offshore installation” has the meaning given by sections 935 and 936,

10

“oil and gas exploration and appraisal” has the meaning given by section

937,

“ordinary share capital”, in relation to a company, means all the

company’s issued share capital (however described), other than capital

the holders of which have a right to a dividend at a fixed rate but have

15

no other right to share in the company’s profits,

“overseas property business” has the meaning given by Chapter 2 of Part

3 of ITTOIA 2005,

“period of account”—

(a)   

in relation to a person, means any period for which the person

20

draws up accounts, and

(b)   

in relation to a trade, profession, vocation or other business,

means any period for which the accounts of the business are

drawn up,

“permanent establishment”, in relation to a company, has the meaning

25

given by section 148 of FA 2003,

“personal representatives” in relation to a person who has died, means—

(a)   

in the United Kingdom, persons responsible for administering

the estate of the deceased, and

(b)   

in a territory outside the United Kingdom, those persons having

30

functions under its law equivalent to those of administering the

estate of the deceased,

“profits or gains” does not include chargeable gains,

“property investment LLP” has the meaning given by section 938,

“qualifying distribution” has the meaning given by section 14(2) of ICTA,

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“qualifying policy” means a policy of insurance which is a qualifying

policy for the purposes of Chapter 1 of Part 7 of ICTA,

“recognised stock exchange” has the meaning given by section 939,

“registered pension scheme” has the meaning given by section 150(2) of

FA 2004,

40

“relevant foreign income” has the meaning given by section 830(1) to (3)

of ITTOIA 2005 but also includes, for any purpose mentioned in any

provision listed in section 830(4) of that Act, income treated as relevant

foreign income for that purpose by that provision,

“research and development” is to be read in accordance with section 940,

45

“retail prices index” means—

(a)   

the general index of retail prices (for all items) published by the

Office for National Statistics, or

(b)   

if that index is not published for a relevant month, any

substituted index or index figures published by that Office,

50

“savings income” has the meaning given by section 18,

 
 

Income Tax Bill
Part 15 — Income Tax Acts definitions etc
Chapter 1 — Definitions

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“savings rate” means the rate of income tax specified in section 7,

“Schedule A business” means any business the profits of which are

chargeable to corporation tax under Schedule A, including the business

in the course of which any transaction is (as a result of paragraph 1(2)

of that Schedule) to be treated as entered into,

5

“scheme administrator”, in relation to a pension scheme, has the meaning

given by section 270 of FA 2004 (but see also sections 271 to 274 of that

Act),

“settled property” (together with references to property comprised in a

settlement) is to be read in accordance with section 466,

10

“settlor” is to be read in accordance with sections 467 to 473,

“starting rate” means the rate of income tax determined in pursuance of

section 6(2),

“starting rate limit” has the meaning given by section 20(1),

“stepchild”, in relation to a civil partner, is to be read in accordance with

15

section 246 of the Civil Partnership Act 2004 (c. 33),

“51% subsidiary”, in relation to bodies corporate, has the same meaning

as in the Corporation Tax Acts (see section 838 of ICTA),

“75% subsidiary”, in relation to bodies corporate, has the same meaning

as in the Corporation Tax Acts (see section 838 of ICTA),

20

“tax” is to be read in accordance with section 832(3) of ICTA,

“tax credit” means a tax credit under section 397(1) of ITTOIA 2005,

“tax year” has the meaning given by section 4(2),

“the tax year 2007-08” (and any corresponding expression in which two

years are similarly mentioned) has the meaning given by section 4(4),

25

“total income” has the meaning given by section 23 (see Step 1 in that

section and also section 31),

“trade” includes any venture in the nature of trade,

“trust rate” means the rate of income tax specified in section 9(1),

“UK generally accepted accounting practice” has the meaning given by

30

section 931(2),

“UK property business” has the meaning given by Chapter 2 of Part 3 of

ITTOIA 2005,

“UK resident” means resident in the United Kingdom (and references to a

UK resident or a UK resident person are to a person who is resident

35

there),

“umbrella scheme” is to be read in accordance with section 468(6) to (9) of

ICTA,

“unauthorised unit trust” means a unit trust scheme which is neither an

authorised unit trust nor an umbrella scheme,

40

“unit holder” is to be read in accordance with section 468(6) to (9) of ICTA,

“unit trust scheme” has the meaning given by section 941,

“venture capital trust” and “VCT” have the same meaning as in Part 6 (see

section 259(1)),

“woodlands” has the meaning given by section 930,

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“year of assessment” means a tax year, and

“the year 1988-1989” means the tax year 1988-1989 (and any

corresponding expression in which two years are similarly mentioned

is to be read in the same way).

 
 

 
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