Income Tax Bill

House of Commons

Session 2006 - 07
Internet Publications
Other Bills before Parliament

Income Tax Bill

Income Tax Bill
Part 17 — Definitions for purposes of Act and final provisions
503

1024
Meaning of “gilt-edged securities”
In this Act “gilt-edged securities” means any securities which—
(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
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that Schedule, if the making of the order is anticipated in the prospectus
under which the securities were issued.
1025
Meaning of “modified net income”
(1)
For the purposes of this Act a person’s modified net income for a tax year
(“year X”) is the person’s net income for year X calculated in accordance with
10
Steps 1 and 2 of section 23 (calculation of income tax liability) as modified by
subsection (2).
(2)
In applying Steps 1 and 2 of section 23, ignore—
(a)
any non-qualifying income included in the person’s total income (see
section 1026),
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(b)
any relief under Chapter 2 of Part 4 for a loss incurred or treated as
incurred, or a payment made, in a tax year later than year X,
(c)
any reliefs to which the person may be entitled under Chapter 4 of Part
8,
(d)
any adjustment of profits resulting from a claim under Chapter 16 of
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Part 2 of ITTOIA 2005 (averaging profits of farmers and creative
artists), if year X is the earlier of the tax years in relation to which the
claim is made,
(e)
any adjustment resulting from an election under section 257 of ITTOIA
2005 (election to carry back post-cessation receipts), and
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(f)
any relief or adjustment resulting from the making, amendment or
revocation of a claim for relief, if the claim, amendment or revocation
would have been out of time but for section 224(4) of ITTOIA 2005
(averaging profits of farmers and creative artists: extension of deadline
for claiming other reliefs).
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(3)
But this section applies for the purposes of section 427 as if subsection (2)(c)
were omitted.
(4)
And this section applies for the purposes of Chapter 9 of Part 9 and Chapter 13
of Part 15 as if for subsection (2)(c) there were substituted—
“(c)
any reliefs to which the person may be entitled under section
35
505,”.
(5)
In this section “claim” includes an election or notice.
1026
Meaning of “non-qualifying income” for the purposes of section 1025
For the purposes of section 1025 an amount included in a person’s total income
is non-qualifying income if it is—
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(a)
income on which income tax is treated as paid under section 399(2) or
400(2) of ITTOIA 2005 (distributions from UK resident companies etc
on which there is no tax credit),
(b)
income on which an individual is liable to income tax as a result of
section 413(2) of ITTOIA 2005 or trustees are so liable as a result of
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section 413(3) of that Act (stock dividend income),

Income Tax Bill
Part 17 — Definitions for purposes of Act and final provisions
504

(c)
income on which any person is liable to income tax under Chapter 6 of
Part 4 of ITTOIA 2005 (release of loan to participator in a close
company),
(d)
income on which an individual is liable to income tax as a result of
section 465 of ITTOIA 2005 or trustees are so liable as a result of section
5
467 of that Act (gains from contracts for life insurance etc), being
income to which section 530 of that Act applies (income tax treated as
paid etc),
(e)
income which is included in the aggregate income of an estate as a
result of section 664(2)(c), (d) or (e) of ITTOIA 2005 (income arising to
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personal representatives and corresponding to income within
paragraph (b), (c) or (d)),
(f)
income on which income tax is treated as paid under section 685A(3) of
ITTOIA 2005 (settlor-interested settlements), or
(g)
an amount that a person is treated as having received under section
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804(5B) of ICTA (double taxation relief: special rules about overlap
profit).
Final provisions
1027
Minor and consequential amendments
Schedule 1 (minor and consequential amendments) has effect.
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1028
Power to make consequential provision
(1)
The Treasury may by order make such provision as the Treasury consider
appropriate in consequence of this Act.
(2)
The power conferred by subsection (1) may not be exercised after 5 April 2010.
(3)
An order under this section may amend, repeal or revoke any provision made
25
by or under an Act.
(4)
An order under this section may contain provision having retrospective effect.
(5)
An order under this section may contain incidental, supplemental,
consequential and transitional provision and savings.
1029
Power to undo changes
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(1)
The Treasury may by order make such provision as the Treasury consider
appropriate, in relation to a case in which the Treasury consider that a
provision of this Act changes the effect of the law, for the purpose of returning
the effect of the law to what it was immediately before 6 April 2007.
(2)
The power conferred by subsection (1) may not be exercised after 5 April 2010.
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(3)
An order under this section may amend, repeal or revoke any provision made
by or under this Act or by or under any other Act.
(4)
An order under this section may contain provision having retrospective effect.
(5)
An order under this section may contain incidental, supplemental,
consequential and transitional provision and savings.
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Income Tax Bill
Part 17 — Definitions for purposes of Act and final provisions
505

1030
Transitional provisions and savings
(1)
Schedule 2 (transitional provisions and savings) has effect.
(2)
The Treasury may by order make such transitional or saving provision as the
Treasury consider appropriate in connection with the coming into force of this
Act.
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(3)
An order under subsection (2) may contain provision having retrospective
effect.
(4)
At any time before section 1014 of this Act (orders and regulations) comes into
force, section 828(4) of ICTA (order-making powers excluded from negative
resolution procedure) has effect as if it included a reference to an order made
10
under subsection (2) of this section.
1031
Repeals and revocations
Schedule 3 (repeals and revocations, including of spent enactments) has effect.
1032
Index of defined expressions
(1)
Schedule 4 (index of defined expressions that apply for the purposes of this
15
Act) has effect.
(2)
That Schedule lists the places where some of the expressions used in this Act
are defined or otherwise explained.
1033
Extent
(1)
This Act extends to England and Wales, Scotland and Northern Ireland (but
20
see subsection (2)).
(2)
An amendment, repeal or revocation contained in Schedule 1 or 3 has the same
extent as the provision amended, repealed or revoked.
1034
Commencement
(1)
This Act comes into force on 6 April 2007 and has effect—
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(a)
for income tax purposes, for the tax year 2007-08 and subsequent tax
years, and
(b)
for corporation tax purposes, for accounting periods ending after 5
April 2007.
(2)
Subsection (1) is subject to subsections (3) and (4).
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(3)
The following—
(a)
Part 5 (enterprise investment scheme),
(b)
Part 3 of Schedule 1 (consequential amendment associated with Part 5),
and
(c)
Part 2 of Schedule 3 (repeals so associated),
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do not have effect in relation to shares issued before 6 April 2007.

This is subject to Schedule 2 (transitional provisions and savings).
(4)
Subsection (1) does not apply to the following provisions of this Act (which
therefore come into force on the day on which this Act is passed)—

Income Tax Bill
Part 17 — Definitions for purposes of Act and final provisions
506

(a)
in Part 15, section 852, and
(b)
in this Part, sections 1017, 1018, 1028, 1029, 1030(2) to (4) and 1033, this
section and section 1035.
1035
Short title
This Act may be cited as the Income Tax Act 2007.
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