Income Tax Bill

House of Commons

Session 2006 - 07
Internet Publications
Other Bills before Parliament

Income Tax Bill

Income Tax Bill
Part 16 — Income Tax Acts definitions etc
Chapter 2 — Other Income Tax Acts provisions
497

(2)
All powers under the following are excluded—
(a)
ICTA (see instead section 828 of that Act),
(b)
section 178(5) of FA 1989 (setting of rates of interest),
(c)
CAA 2001 (see instead section 570B of that Act),
(d)
ITEPA 2003 (see instead section 717 of that Act),
5
(e)
Part 4 of FA 2004 (see instead section 282 of that Act),
(f)
ITTOIA 2005 (see instead section 873 of that Act), and
(g)
the following provisions of this Act—
(i)
section 184(3)(b) and (c) (EIS: the unquoted status requirement
(designated exchanges etc)),
10
(ii)
section 295(3)(b) and (c) (venture capital trusts: the unquoted
status requirement (designated exchanges etc)), and
(iii)
section 1005(1)(b) (meaning of “recognised stock exchange”).
(3)
Any orders or regulations made under a power to which this section applies
must be made by statutory instrument.
15
(4)
Any orders or regulations made under a power to which this section applies
are subject to annulment in pursuance of a resolution of the House of
Commons.
(5)
Subsection (4) does not apply if the order or regulations are made under—
(a)
section 73A of FA 2004 (exemption for designated international
20
organisations), or
(b)
any of the following provisions of this Act—
(i)
section 21(5) (indexation of starting rate limit and basic rate
limit),
(ii)
section 57 (indexation of allowances),
25
(iii)
section 114 or 802 (exclusion of amounts in calculating
individual’s contribution to the firm),
(iv)
section 400(4)(e) (amounts treated as contributed by an
individual to investment partnership capital),
(v)
section 897 (public revenue dividends: regulations about
30
collection of income tax),
(vi)
section 962 (regulations modifying Chapter 15 of Part 15),
(vii)
section 979 (designated international organisations: exceptions
from duties to deduct),
(viii)
section 991(2)(e) (meaning of “bank”), or
35
(ix)
section 1030(2) (power to make transitional or saving provision
in connection with coming into force of this Act).
(6)
Further, subsection (4) does not apply—
(a)
if any other Parliamentary procedure is expressly provided to apply in
relation to the order or regulations, or
40
(b)
if the order in question appoints a day for the purposes of any provision
of the Income Tax Acts from which the provision will have effect (with
or without amendments) or will cease to have effect,

and is also subject to any other provision to the contrary.

Income Tax Bill
Part 16 — Income Tax Acts definitions etc
Chapter 2 — Other Income Tax Acts provisions
498

1015
Territorial scope of charges under certain provisions to which section 1016
applies
(1)
This section applies in relation to any amount chargeable to income tax under
or by virtue of any provision—
(a)
to which section 1016 applies, and
5
(b)
which is listed in Part 2 or 3 of the table in that section (provisions not
in ITTOIA 2005).
(2)
An amount arising to a UK resident is chargeable to tax whether or not it is
from a source in the United Kingdom.
(3)
An amount arising to a non-UK resident is chargeable to tax only if it is from a
10
source in the United Kingdom.
(4)
References in this section to amounts which are from a source in the United
Kingdom include, in the case of any amount which does not have a source,
references to amounts which have a comparable connection to the United
Kingdom.
15
(5)
This section is subject to any express or implied provision to the contrary in any
provision of the Income Tax Acts.
1016
Table of provisions to which this section applies
(1)
In the Income Tax Acts references to any provision to which this section applies
are references to any provision listed in the following table so far as it relates
20
to income tax (but subject to any applicable limitation in subsections (3) and
(4)).
(2)
This is the table—
PART 1

Provisions of ITTOIA 2005
Description

25

Chapter 18 of Part 2
Post-cessation receipts: trades,

professions and vocations

Chapter 8 of Part 3
Rent receivable in connection

with a UK section 12(4)

concern

30

Chapter 9 of Part 3
Rent receivable for UK

electric-line wayleaves

Chapter 10 of Part 3
Post-cessation receipts: UK

property businesses

Chapter 2 of Part 4
Interest

35

Chapter 9 of Part 4
Gains from contracts for life

insurance etc

Chapter 11 of Part 4
Transactions in deposits

Income Tax Bill
Part 16 — Income Tax Acts definitions etc
Chapter 2 — Other Income Tax Acts provisions
499

Provisions of ITTOIA 2005
Description

Chapter 12 of Part 4
Disposals of futures and

options involving guaranteed

returns

Section 579
Royalties and other income

5

from intellectual property

Section 583
Income from disposals of

know-how

Section 587
Income from sales of patent

rights

10

Chapter 3 of Part 5
Films and sound recordings:

non-trade businesses

Chapter 4 of Part 5
Certain telecommunication

rights: non-trading income

Chapter 5 of Part 5
Settlements: amounts treated

15

as income of settlor

Section 682(4)
Adjustments after the

administration period

Chapter 8 of Part 5
Income not otherwise charged

Section 844(4)
Withdrawal of relief for

20

unremittable foreign income

after source ceases

PART 2

Provisions of this Act
Description

Chapter 2 of Part 12
Accrued income profits

25

Section 720, 727 or 731
Transfer of assets abroad

Chapter 3 of Part 13
Transactions in land

Section 776
Sales of occupation income

Section 796
Individuals benefited by film

relief

30

Section 804
Losses derived from

exploiting licence: individuals

in partnership

Income Tax Bill
Part 16 — Income Tax Acts definitions etc
Chapter 2 — Other Income Tax Acts provisions
500

PART 3

Other provisions
Description

Section 214(1)(ab) of ICTA
Chargeable payments

connected with exempt

distributions

5

Section 571(1) of ICTA
Cancellation of certificates:

schemes for rationalising

industry

Section 730(4) of ICTA
Transfers of income arising

from securities

10

Section 761(1)(b)(i) of ICTA
Offshore income gains

Section 774(1) of ICTA
Transactions between dealing

company and associated

company

Section 780(3A)(a) of ICTA
Sale and lease-back (taxation of

15

consideration received)

Section 781(1) of ICTA
Assets leased to traders and

others

Section 786(5)(a) of ICTA
Transactions associated with

loans or credit

20

Section 68(2) of FA 1989
Employee share ownership

trust (chargeable event)

Section 71(4) of FA 1989
Employee share ownership

trust (borrowing)

Section 258(4) of CAA 2001
Special leasing

25

Section 479(4) of CAA 2001
Persons having qualifying

non-trade expenditure

Section 394(2) of ITEPA 2003
Charge on administrator of

non-approved pension scheme

Section 476(5) of ITEPA 2003
Charge on occurrence of

30

chargeable event

(3)
For the purposes of this section—
(a)
any reference to any provision of ITTOIA 2005 does not include that
provision so far as relating to relevant foreign income,
(b)
the reference to Chapter 2 of Part 4 of ITTOIA 2005 is a reference to that
35
Chapter only so far as relating to an issue of funding bonds where—
(i)
the issue is treated under section 380 of that Act as a payment of
interest, and
(ii)
the person by or through whom they are issued is required to
retain bonds under section 939(2) of this Act but it is
40
impracticable for the person to do so,

Income Tax Bill
Part 17 — Definitions for purposes of Act and final provisions
501

(c)
the reference to Chapter 9 of Part 4 of ITTOIA 2005 is a reference to that
Chapter only so far as relating to gains—
(i)
which are from a policy or contract specified in section 531(3) of
that Act, and
(ii)
which do not fall within section 532 or 534 of that Act,
5
(d)
the reference to section 579 of ITTOIA 2005 does not include that
section so far as relating to any annual payment,
(e)
the reference to Chapter 4 of Part 5 of ITTOIA 2005 does not include
that Chapter so far as relating to any annual payment, and
(f)
the reference to Chapter 5 of Part 5 of ITTOIA 2005 does not include
10
that Chapter so far as relating to income which falls within section
619(3) of that Act.
(4)
For the purposes of this section the reference to section 720 or 727 of this Act
does not include those sections so far as relating to income falling within
subsection (3) of section 745.
15
Part 17
Definitions for purposes of Act and final provisions
Definitions for the purposes of Act
1017
Abbreviated references to Acts
In this Act—
20
“CAA 2001” means the Capital Allowances Act 2001 (c. 2),
“FA”, followed by a year, means the Finance Act of that year,
“F(No.2)A”, followed by a year, means the Finance (No.2) Act of that year,
“FISMA 2000” means the Financial Services and Markets Act 2000 (c. 8),
“ICTA” means the Income and Corporation Taxes Act 1988 (c. 1),
25
“IHTA 1984” means the Inheritance Tax Act 1984 (c. 51),
“ITEPA 2003” means the Income Tax (Earnings and Pensions) Act 2003
(c. 1),
“ITTOIA 2005” means the Income Tax (Trading and Other Income) Act
2005 (c. 5),
30
“TCGA 1992” means the Taxation of Chargeable Gains Act 1992 (c. 12),
and
“TMA 1970” means the Taxes Management Act 1970 (c. 9).
1018
“Act” to include Scottish and Northern Ireland legislation in some cases
(1)
In the following provisions of this Act, “Act” includes an Act of the Scottish
35
Parliament—

section 66 (restriction on relief unless trade is commercial),

section 532 (exemption for savings and investment income),

section 536 (exemption for miscellaneous income),

section 558 (approved charitable investments),
40

section 1028 (power to make consequential provision), and

section 1029 (power to undo changes).

Income Tax Bill
Part 17 — Definitions for purposes of Act and final provisions
502

(2)
In the following provisions of this Act, “Act” includes Northern Ireland
legislation—

section 66 (restriction on relief unless trade is commercial),

section 114 (exclusion of amounts in calculating contribution to the
firm),
5

section 532 (exemption for savings and investment income),

section 536 (exemption for miscellaneous income),

section 558 (approved charitable investments),

section 802 (exclusion of amounts in calculating partner’s capital
contribution),
10

section 1028 (power to make consequential provision), and

section 1029 (power to undo changes).
1019
Meaning of “certificate of deposit”
In this Act “certificate of deposit” means a document—
(a)
relating to the deposit of money in any currency,
15
(b)
recognising an obligation to pay a stated principal amount to bearer or
to order, with or without interest, and
(c)
by the delivery of which, with or without endorsement, the right to
receive that stated amount, with or without interest, is transferable.
1020
Claims and elections
20
(1)
In this Act any reference to a claim or election is to a claim or election in writing
or in any form authorised (in relation to the case in question) by directions
under section 118 of FA 1998.
(2)
For further information about claims and elections, see TMA 1970 (in
particular, section 42(2), (10) and (11) and Schedule 1A).
25
1021
Application of definitions of “connected” persons and “control”
(1)
Section 993 (meaning of “connected” persons) applies for the purposes of this
Act unless otherwise indicated.
(2)
Section 995 (meaning of “control”) applies for the purposes of this Act unless
otherwise indicated.
30
1022
Meaning of “debenture”
(1)
In this Act “debenture” has the meaning given by section 744 of the Companies
Act 1985 (c. 6).
(2)
This section does not apply for the purposes of sections 559, 560 and 691.
1023
Meaning of “double taxation arrangements”
35
In this Act “double taxation arrangements” means arrangements which have
effect under section 788 of ICTA.