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Session 2006 - 07
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Income Tax Bill


Income Tax Bill

xxvii

 

608   

Exceptions to section 607

Additional tax treatment

609   

Additional income tax consequences of price differences

Interpretation

610   

Repurchase price in deemed manufactured payment case

Power to modify

611   

Power to modify Chapter in non-arm’s length case

Chapter 6

Powers to modify repo provisions

612   

Non-standard repo cases

613   

Redemption arrangements

614   

Sections 612 and 613: supplementary

Part 12

Tax avoidance

Chapter 1

Transactions in securities

Introduction

615   

Overview of Chapter

616   

Meaning of “income tax advantage”

Person liable to counteraction of income tax advantages

617   

Person liable to counteraction of income tax advantage

618   

Exception where no tax avoidance object shown

Circumstances in which income tax advantages obtained or obtainable

619   

Abnormal dividends used for exemptions or reliefs (circumstance A)

620   

Deductions from profits obtained following distribution or dealings

(circumstance B)

621   

Receipt of consideration representing company’s assets, future receipts or

trading stock (circumstance C)

622   

Receipt of consideration in connection with relevant company distribution

(circumstance D)

623   

Receipt of assets of relevant company (circumstance E)

624   

Meaning of “relevant company” in sections 622 and 623

625   

Abnormal dividends: general

626   

Abnormal dividends: the excessive return condition

627   

Abnormal dividends: the excessive accrual condition

 
 

Income Tax Bill

xxviii

 

Procedure for counteraction of income tax advantages

628   

Preliminary notification that section 617 may apply

629   

Opposed notifications: statutory declarations

630   

Opposed notifications: determinations by tribunal

631   

Counteraction notices

632   

Limit on amount assessed in section 622 and 623 cases

633   

Timing of assessments in section 623 cases

Clearance procedure and information powers

634   

Application for clearance of transactions

635   

Effect of clearance notification under section 634

636   

Power to obtain information

The tribunal

637   

The tribunal

Appeals

638   

Appeals against counteraction notices

639   

Rehearing by tribunal of appeal against counteraction notice

640   

Statement of case by tribunal for opinion of High Court or Court of Session

641   

Cases before High Court or Court of Session

642   

Effect of appeals against tribunal’s determination under section 639

643   

Appeals from High Court or Court of Session

644   

Proceedings in Northern Ireland

Supplementary

645   

Application of Chapter where individual within section 617 dies

646   

Interpretation of Chapter

Chapter 2

Transfer of assets abroad

Introduction

647   

Overview of Chapter

648   

Meaning of “relevant transaction”

649   

Meaning of “relevant transfer” and “transfer”

650   

Meaning of “assets” etc

651   

Meaning of “person abroad” etc

652   

Meaning of “associated operation”

Charge where power to enjoy income

653   

Charge to tax on income treated as arising under section 654

654   

Individuals with power to enjoy income as a result of relevant transactions

655   

When an individual has power to enjoy income of person abroad

656   

The enjoyment conditions

657   

Special rules where benefit provided out of income of person abroad

658   

Reduction in amount charged where controlled foreign company involved

 
 

Income Tax Bill

xxix

 

659   

Non-domiciled individuals

Charge where capital sums received

660   

Charge to tax on income treated as arising under section 661

661   

Individuals receiving capital sums as a result of relevant transactions

662   

The capital receipt conditions

663   

Non-domiciled individuals

Charge where benefit received

664   

Charge to tax on income treated as arising under section 665

665   

Non-transferors receiving a benefit as a result of relevant transactions

666   

Income charged under section 664

667   

Reduction in amount charged: previous capital gains tax charge

668   

Non-domiciled individuals

Exemptions: no tax avoidance purpose or genuine commercial transaction

669   

Exemptions: introduction

670   

Exemption: all relevant transactions post-4 December 2005 transactions

671   

Meaning of “commercial transaction”

672   

Exemption: all relevant transactions pre-5 December 2005 transactions

673   

Exemption: relevant transactions include both pre-5 December 2005 and post-

4 December 2005 transactions

674   

Application of section 675 (partial exemption)

675   

Partial exemption where later associated operations fail conditions

General

676   

No duplication of charges

677   

Meaning of taking income into account in charging income tax for section 676

678   

Rates of tax applicable to income charged under sections 653 and 660 etc

679   

Deductions and reliefs where individual charged under section 653 or 660

680   

Amounts corresponding to accrued income scheme profits and related

interest

Supplementary

681   

Power to obtain information

682   

Restrictions on particulars to be provided by solicitors

683   

Restrictions on particulars to be provided by banks

684   

Special Commissioners’ jurisdiction on appeals

Chapter 3

Transactions in land

Introduction

685   

Overview of Chapter

686   

Meaning of disposing of land

687   

Priority of other income tax provisions

 
 

Income Tax Bill

xxx

 

Charge on gains from transactions in land

688   

Charge to tax on gains from transactions in land

689   

Income treated as arising when gains obtained from some land disposals

690   

Person obtaining gain

691   

Income charged

692   

Person liable

693   

Method of calculating gain

Further provisions relevant to the charge

694   

Transactions, arrangements, sales and realisations relevant for Chapter

695   

Tracing value

696   

Meaning of “another person”

697   

Valuations and apportionments

Exemptions

698   

Exemption: gain attributable to period before intention to develop formed

699   

Exemption: disposals of shares in companies holding land as trading stock

700   

Exemption: private residences

Recovery of tax

701   

Recovery of tax where consideration receivable by person not assessed

702   

Recovery of tax: certificates of tax paid etc

Clearances and power to obtain information

703   

Clearance procedure

704   

Power to obtain information

Interpretation

705   

Interpretation of Chapter

Chapter 4

Sales of occupation income

Introduction

706   

Overview of Chapter

707   

Meaning of “occupation”

708   

Priority of other tax provisions

Charge on sale of occupation income

709   

Charge to tax on sale of occupation income

710   

Conditions for sections 711 and 712 to apply

711   

Income arising where capital amount other than derivative property or right

obtained

712   

Income arising where derivative property or right obtained

 
 

Income Tax Bill

xxxi

 

Further provisions relevant to the charge

713   

Transactions, arrangements, sales and realisations relevant for Chapter

714   

Tracing value

715   

Meaning of “other person”

716   

Valuations and apportionments

Exemption for sales of going concerns

717   

Exemption for sales of going concerns

718   

Restriction on exemption: sales of future earnings

Recovery of tax

719   

Recovery of tax where consideration receivable by person not assessed

720   

Recovery of tax: certificates of tax paid etc

Power to obtain information

721   

Power to obtain information

Interpretation

722   

Minor definitions

Chapter 5

Avoidance involving trading losses

Introduction

723   

Overview of Chapter

Individuals in partnership: recovery of excess relief

724   

Charge to tax on income treated as received under section 725

725   

Partners claiming excess sideways or capital gains relief

726   

Calculating the amount of income treated as received

727   

Meaning of “the total amount of trade losses claimed” etc

728   

Meaning of “post-1 December 2004 loss”

Individuals claiming relief for film-related trading losses

729   

Charge to tax on income treated as received under section 730

730   

Individuals claiming sideways or capital gains relief for film-related losses

731   

Meaning of “non-taxable consideration” etc

732   

Meaning of “disposal of a right of the individual to profits” etc

733   

Meaning of “film-related losses” etc

734   

Meaning of “capital contribution”

735   

Exclusion of amounts in calculating capital contribution by a partner

736   

Prohibition against double counting

Individuals in partnership claiming relief for licence-related trading losses

737   

Charge to tax on income treated as received under section 738

 
 

Income Tax Bill

xxxii

 

738   

Partners claiming relief for licence-related trading losses

739   

Calculation of amount of income treated as received by the individual

740   

Supplementary provision relating to calculation in section 739

741   

Meaning of “disposal of the licence” etc

742   

Other definitions

Part 13

Income tax liability: miscellaneous rules

Chapter 1

Limits on liability to income tax of non-UK residents

Introduction

743   

Overview of Chapter

Limit for non-UK resident individuals, trustees etc

744   

Limit on liability to income tax of non-UK residents

745   

Case where limit not to apply

746   

Meaning of “disregarded income”

747   

Meaning of “disregarded transaction income”

Limit for non-UK resident companies

748   

Limit on liability to income tax of non-UK resident companies

749   

Meaning of “disregarded company income”

The independent broker conditions

750   

The independent broker conditions

The independent investment manager conditions

751   

The independent investment manager conditions

752   

Investment managers: the 20% rule

753   

Meaning of “qualifying period”

754   

Meaning of “relevant disregarded income”

755   

Meaning of “beneficial entitlement”

756   

Treatment of transactions where requirements of 20% rule not met

757   

Application of 20% rule to collective investment schemes

Supplementary

758   

Meaning of “disregarded savings and investment income”

759   

Meaning of “disregarded annual payments”

760   

Meaning of “investment manager” and “investment transaction”

761   

Transactions through brokers and investment managers

 
 

Income Tax Bill

xxxiii

 

Chapter 2

Residence

762   

Residence of individuals temporarily abroad

763   

Residence of individuals working abroad

764   

Foreign income of individuals in the United Kingdom for temporary purpose

765   

Employment income of individuals in the United Kingdom for temporary

purpose

766   

Visiting forces and staff of designated allied headquarters

767   

Residence of personal representatives

768   

Residence rules for trustees and companies

Chapter 3

Jointly held property

769   

Jointly held property

770   

Jointly held property: declarations of unequal beneficial interests

Chapter 4

Other miscellaneous rules

771   

Local authorities and local authority associations

772   

Issue departments of the Reserve Bank of India and the State Bank of Pakistan

773   

Government securities held by non-UK resident central banks

774   

Official agents of Commonwealth countries etc

775   

European Economic Interest Groupings

776   

Restriction of deductions for annual payments

777   

Letters patent etc: exempting provisions

778   

Extra return to be treated as interest etc

779   

Interpretation of section 778

Part 14

Deduction of income tax at source

Chapter 1

Introduction

780   

Overview of Part

781   

Income tax deducted at source treated as income tax paid by recipient

782   

Interaction with other Income Tax Acts provisions

Chapter 2

Deduction by deposit-takers and building societies

Introduction

783   

Overview of Chapter

 
 

 
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Revised 8 December 2006