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Income Tax Bill


Income Tax Bill
Schedule 1 — Minor and consequential amendments
Part 1 — Income and Corporation Taxes Act 1988

509

 

139        

In section 615(3) (exemption from tax in respect of certain pensions) for

“section 349(1)” substitute “Chapter 6 of Part 14 of ITA 2007 (deduction from

annual payments and patent royalties)”.

140        

In section 657(2)(b) (purchased life annuities to which section 656 applies)

after “or 273” insert “of this Act or section 459 of ITA 2007”.

5

141        

In section 658(4)(b) (supplementary) omit “(notwithstanding anything in

section 348)”.

142        

In section 659E(1) (treatment of income from property investment LLPs) at

the end insert “(see section 938 of ITA 2007)”.

143        

Omit section 660C(3) (nature of charge on settlor).

10

144        

Omit sections 685A to 687 (liability of trustees).

145   (1)  

Amend section 687A (discretionary payments made by trustees to

companies) as follows.

      (2)  

In subsection (1) for paragraph (b) substitute—

“(b)   

sections 494 and 495 of ITA 2007 apply in relation to the

15

payment;”.

      (3)  

In subsection (2)(a) for “charity” substitute “charitable company”.

      (4)  

In subsection (3)—

(a)   

in paragraph (a)(iii) for “paragraph 5(1) of Schedule 16” substitute

“section 885 of ITA 2007 (set off of income tax suffered against

20

income tax payable)”, and

(b)   

in paragraph (c) for “section 687(2)” substitute “section 494 of ITA

2007”.

      (5)  

In the sidenote for “Payments to companies under section 687” substitute

“Discretionary payments by trustees to companies”.

25

146        

Omit section 689A (disregard of trustees’ expenses where beneficiary non-

UK resident).

147   (1)  

Amend section 689B (order in which trustees’ expenses are to be set against

income) as follows.

      (2)  

In subsection (3) for the words from “to which section 1A applies” to the end

30

substitute “of the trustees which is savings income (within the meaning of

section 18 of ITA 2007).”

      (3)  

Omit subsection (4).

      (4)  

At the end insert—

“(5)   

This section applies for corporation tax purposes only.”

35

148        

Omit sections 690 to 694.

149        

Omit section 698A.

150        

In section 699A(4)(b) (untaxed sums comprised in the income of the estate)

for “lower rate” substitute “savings rate”.

151        

In section 701(3A) (interpretation of sections 695 to 700) for “lower rate”,

40

wherever it occurs, substitute “savings rate”.

 

 

Income Tax Bill
Schedule 1 — Minor and consequential amendments
Part 1 — Income and Corporation Taxes Act 1988

510

 

152        

In the heading for Chapter 1 of Part 17 (cancellation of tax advantages from

certain transactions in securities) for “TAX” substitute “CORPORATION

TAX”.

153   (1)  

Amend section 703 (cancellation of tax advantage) as follows.

      (2)  

In subsection (1)—

5

(a)   

for “person” substitute “company”,

(b)   

for “tax”, in both places where it occurs, substitute “corporation tax”,

(c)   

for “he” substitute “it”, and

(d)   

for “him” substitute “it”.

      (3)  

In subsection (2)—

10

(a)   

for “tax” substitute “corporation tax”,

(b)   

for “person” substitute “company”, and

(c)   

for “him” substitute “it”.

      (4)  

In subsection (3)—

(a)   

for “tax advantage”, in both places where it occurs, substitute

15

“corporation tax advantage”,

(b)   

for “person” substitute “company”,

(c)   

for “him”, in both places where it occurs, substitute “it”,

(d)   

omit “in the case of corporation tax”, and

(e)   

for “liability to tax” substitute “liability to corporation tax”.

20

      (5)  

Omit subsection (3A).

      (6)  

In subsection (9)—

(a)   

for “person”, in both places where it occurs, substitute “company”,

(b)   

for “him”, wherever it occurs, substitute “it”, and

(c)   

for “his” substitute “its”.

25

      (7)  

In subsection (10) for “person” substitute “company”.

      (8)  

Omit subsection (11).

      (9)  

In subsection (12)—

(a)   

for “tax advantage”, in both places where it occurs, substitute

“corporation tax advantage”,

30

(b)   

for “chargeable period”, in the second place where it occurs,

substitute “accounting period”, and

(c)   

for “Tax Acts” substitute “Corporation Tax Acts”.

     (10)  

In the sidenote for “tax” substitute “corporation tax”.

154   (1)  

Amend section 704 (the prescribed circumstances) as follows.

35

      (2)  

After “The circumstances mentioned in section 703(1) are” insert “as follows

(and in this section references to “the section 703(1) company” are references

to the company referred to in that section)”.

      (3)  

In paragraph A—

(a)   

for “person in question” substitute “section 703(1) company”,

40

(b)   

in paragraph (a) for “tax” substitute “corporation tax”, and

(c)   

omit from “, or” at the end of paragraph (da) to the end of paragraph

(g).

 

 

Income Tax Bill
Schedule 1 — Minor and consequential amendments
Part 1 — Income and Corporation Taxes Act 1988

511

 

      (4)  

In paragraph B(1)—

(a)   

for “person in question” substitute “section 703(1) company”, and

(b)   

for “him”, wherever it occurs, substitute “it”.

      (5)  

In paragraph B(2) for “tax advantage” substitute “corporation tax

advantage”.

5

      (6)  

In paragraph C(1)—

(a)   

for “person in question”, in both places where it occurs, substitute

“section 703(1) company”,

(b)   

at the end of sub-paragraph (b) add “or section 620 of ITA 2007”, and

(c)   

for “he” substitute “it”.

10

      (7)  

In paragraph D(1) for “person in question” substitute “section 703(1)

company”.

      (8)  

In paragraph E—

(a)   

in sub-paragraph (1) for “person in question” substitute “section

703(1) company”,

15

(b)   

in sub-paragraph (2)—

(i)   

for “person” substitute “company”,

(ii)   

for “tax”, in both places where it occurs, substitute

“corporation tax”, and

(iii)   

for “the year” substitute “the accounting period”, and

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(c)   

in the definition of “non-taxable” in sub-paragraph (3)—

(i)   

for “person” substitute “section 703(1) company”, and

(ii)   

for “tax” substitute “corporation tax”.

155   (1)  

Amend section 705 (appeals against Board’s notices under section 703) as

follows.

25

      (2)  

In subsection (1)—

(a)   

for “person to whom” substitute “company to which”, and

(b)   

for “him” substitute “it”.

      (3)  

In subsection (2)—

(a)   

for “he”, in the first place where it occurs, substitute “the company”,

30

and

(b)   

for “he or they” substitute “the company or the Board”.

156   (1)  

Amend section 705A (statement of case by tribunal for opinion of High

Court) as follows.

      (2)  

In subsections (1) and (2) for “his” substitute “its”.

35

      (3)  

In subsection (3) for “he” substitute “that party”.

      (4)  

In subsection (5)—

(a)   

for “he” and “the party requiring it” substitute “that party”, and

(b)   

for “his” substitute “that party’s”.

      (5)  

In subsections (10) and (11)(a) and (b) for “tax” substitute “corporation tax”.

40

157        

In section 705B(1) (proceedings in Northern Ireland) for the words from “the

Taxes Acts” to “shall have effect” substitute “the Management Act and the

Corporation Tax Acts shall have effect”.

 

 

Income Tax Bill
Schedule 1 — Minor and consequential amendments
Part 1 — Income and Corporation Taxes Act 1988

512

 

158   (1)  

Amend section 707 (procedure for clearance in advance) as follows.

      (2)  

In subsection (1)—

(a)   

for “person”, wherever it occurs, substitute “company”, and

(b)   

for “him”, wherever it occurs, substitute “it”.

      (3)  

In subsection (3) for “person” substitute “company”.

5

159        

In section 708 (power to obtain information)—

(a)   

for “person”, in both places where it occurs, substitute “company”,

(b)   

for “whom” substitute “which”,

(c)   

for “him”, wherever it occurs, substitute “it”, and

(d)   

for “his” substitute “its”.

10

160   (1)  

Amend section 709 (meaning of “tax advantage” and other expressions) as

follows.

      (2)  

In subsection (1) for “tax”, in each place where it occurs, substitute

“corporation tax”.

      (3)  

In subsection (4)(a) for “he”, in both places where it occurs, substitute “the

15

recipient”.

      (4)  

In subsection (6)(a)—

(a)   

for “he”, in both places where it occurs, substitute “the recipient”,

and

(b)   

for “him” substitute “the recipient”.

20

      (5)  

In the sidenote for ““tax advantage”” substitute ““corporation tax

advantage””.

161   (1)  

Amend section 715 (exceptions from sections 713 and 714) as follows.

      (2)  

In subsection (1)(d)—

(a)   

in sub-paragraph (i) after “505(1)(c)” insert “of this Act, or section 532

25

of ITA 2007,”, and

(b)   

in sub-paragraph (ii) for the words from “paragraph (d)” to “that

paragraph” substitute “section 505(1)(d) of this Act or section 533(1)

of ITA 2007, exemption could be granted under either of those

provisions”.

30

      (3)  

In subsection (6) for the words from “one in the case of which” to “dividend

manufacturer” substitute “one under which the seller is required to pay

another person manufactured interest or a manufactured overseas dividend

as mentioned in section 578 or 581 of ITA 2007”.

162        

Omit section 720(5) (transfers of securities with or without accrued interest).

35

163        

In section 722A(5) (gilt-strips: deemed transfer), in the definition of “gilt-

edged security” for “section 50” substitute “section 918 of ITA 2007”.

164        

In section 723 (foreign securities: delayed remittances) after subsection (5)

insert—

“(5A)   

An amount charged under subsection (4) above is treated for income

40

tax purposes as an amount of income.”

165   (1)  

Amend section 727A (exception for sale and repurchase of securities) as

follows.

 

 

Income Tax Bill
Schedule 1 — Minor and consequential amendments
Part 1 — Income and Corporation Taxes Act 1988

513

 

      (2)  

In subsection (1) for the words from “section 730A” to the end substitute

“section 608 of ITA 2007 prevents section 607 of that Act (treatment of price

differences under repos) from applying.”

      (3)  

In subsection (3) for “section 839” substitute “section 927 of ITA 2007”.

166   (1)  

Amend section 730A (treatment of price differential on sale and repurchase

5

of securities) as follows.

      (2)  

In subsections (2), (3) and (4) for “Tax Acts” substitute “Corporation Tax

Acts”.

      (3)  

In subsection (7)—

(a)   

for “tax” substitute “corporation tax”, and

10

(b)   

omit the words from “, 613(4) or” to “Act 2004”.

167   (1)  

Amend section 730B (interpretation of section 730A) as follows.

      (2)  

In subsection (3) for “has the same meaning as in section 737A” substitute

“means United Kingdom equities, United Kingdom securities or overseas

securities”.

15

      (3)  

After subsection (3) insert—

“(3A)   

In this section “United Kingdom equities”, “United Kingdom

securities” and “overseas securities” have the meanings given by

paragraph 1(1) of Schedule 23A.”

168   (1)  

Amend section 730BB (exchange gains and losses on sale and repurchase of

20

securities) as follows.

      (2)  

In subsection (7) for “this section and sections 730A, 737A and 737C”

substitute “the excepted provisions specified in subsection (7A) below”.

      (3)  

After subsection (7) insert—

“(7A)   

The excepted provisions are—

25

(a)   

this section,

(b)   

section 730A,

(c)   

section 737A,

(d)   

section 737C,

(e)   

Chapter 4 of Part 11 of ITA 2007 (deemed manufactured

30

payments), and

(f)   

Chapter 5 of Part 11 of ITA 2007 (price differences under

repos).”

169        

In section 731(2A) (application and interpretation of sections 732 to 734) after

“737A(5)” insert “below or section 602(1) of ITA 2007”.

35

170        

Omit section 733(2) (persons entitled to exemptions).

171        

In section 734(1) (persons other than dealers in securities) for “section 380 or

381” substitute “section 64 or 72 of ITA 2007”.

172        

In section 736(4) (company dealing in securities: distribution materially

reducing value of holding) for “section 839 shall have effect in relation to

40

paragraph (b) above” substitute “, for the purposes of paragraph (b) above,

whether persons are connected is determined in accordance with section

839, but”.

 

 

Income Tax Bill
Schedule 1 — Minor and consequential amendments
Part 1 — Income and Corporation Taxes Act 1988

514

 

173   (1)  

Amend section 736B (deemed manufactured payments in the case of stock

lending arrangements) as follows.

      (2)  

In subsection (2)—

(a)   

after “that Schedule” insert “, and section 97 of the Finance Act 1996

(loan relationships: manufactured interest),”, and

5

(b)   

after “apply” insert “for corporation tax purposes”.

      (3)  

In subsection (2A)—

(a)   

in paragraph (a) omit “income tax or”, and

(b)   

in paragraph (b) omit “total income or, as the case may be,”.

174   (1)  

Amend section 736C (deemed interest: cash collateral under stock lending

10

arrangements) as follows.

      (2)  

In subsections (2), (3) and (4) for “Tax Acts” substitute “Corporation Tax

Acts”.

      (3)  

Omit subsection (8).

      (4)  

In subsection (11) in the definition of “tax advantage” for “section 709(1)”

15

substitute “section 840ZA”.

175   (1)  

Amend section 737A (sale and repurchase of securities: deemed

manufactured payments) as follows.

      (2)  

In subsection (5) —

(a)   

after “dividend manufacturing regulations” insert “, and section 97

20

of the Finance Act 1996 (loan relationships: manufactured interest),”,

and

(b)   

after “apply” insert “for corporation tax purposes”.

      (3)  

In subsection (5A), omit “income tax or”, “total income or” and “Where the

relevant person is a company,”.

25

176   (1)  

Amend section 737C (deemed manufactured payments: further provisions)

as follows.

      (2)  

In subsection (7)—

(a)   

for “Subsection (8)” substitute “Subsection (9)”,

(b)   

for “paragraph 3 of Schedule 23A” substitute “section 97 of the

30

Finance Act 1996”, and

(c)   

omit the words from “and in subsection (8) below” to the end.

      (3)  

Omit subsection (8).

      (4)  

For subsection (9) substitute—

“(9)   

Where this subsection applies, the repurchase price of the securities

35

shall be treated, for the purposes of section 730A, as increased by an

amount equal to the amount of the dividend mentioned in section

737A(2)(a) or (2A)(a).”

177        

In section 737D(1) (power to provide for manufactured payments to be

eligible for relief)—

40

(a)   

after “from” insert “corporation”, and

(b)   

omit the words from “, 613(4) or” to “Act 2004”.

178   (1)  

Amend section 737E (power to modify section 737C) as follows.

 

 

Income Tax Bill
Schedule 1 — Minor and consequential amendments
Part 1 — Income and Corporation Taxes Act 1988

515

 

      (2)  

In subsection (4) omit “or 263D”.

      (3)  

In subsection (6)(b) omit “or 263D”.

179        

Omit sections 739 to 746 (transfer of assets abroad).

180        

In section 747(4) (imputation of chargeable profits and creditable tax of

controlled foreign companies) omit paragraph (b) and the “and”

5

immediately before it.

181   (1)  

Amend section 761 (offshore income gains) as follows.

      (2)  

In subsection (6)—

(a)   

for “charity” in the first place where it occurs, substitute “charitable

company”,

10

(b)   

for “tax” substitute “corporation tax”, and

(c)   

omit the words from “; but” to the end.

      (3)  

After that subsection insert—

“(6A)   

See section 535 of ITA 2007 for an exemption for income tax purposes

for offshore income gains accruing to a charitable trust.

15

(6B)   

If property held on charitable trusts ceases to be subject to charitable

trusts and that property represents directly or indirectly an offshore

income gain, the trustees shall be treated as if they had disposed of

and immediately reacquired that property for a consideration equal

to its market value, any gain (calculated in accordance with Schedule

20

28) accruing being treated as an offshore income gain not accruing to

a charity.

(6C)   

In this section “charity” and “charitable company” have the same

meaning as in section 506 and “market value” has the same meaning

as in the 1992 Act.”

25

182        

In section 762 (offshore income gains accruing to persons resident or

domiciled abroad)—

(a)   

in subsection (5)—

(i)   

in paragraph (a) for “sections 739 and 740” substitute

“Chapter 2 of Part 12 of ITA 2007 (transfer of assets abroad)”,

30

and

(ii)   

in paragraph (b) for “those sections” substitute “that

Chapter”, and

(b)   

in subsection (6) for “section 739 or 740 above” substitute “Chapter 2

of Part 12 of ITA 2007”.

35

183        

In section 763 (deduction of offshore income gain in determining capital

gain) for subsection (8) substitute—

“(8)   

For the purposes of subsection (7)(b) above, whether the person who

made the disposal is connected with another person is determined in

accordance with section 839.”

40

184        

Omit section 775 (sale by individual of income derived from his personal

activities).

185        

In section 775A(4)(c) (transfer of rights to receive annual payments) for

“(annual payments that are not charges on income)” substitute “(certain

 

 

 
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