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Income Tax Bill


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

539

 

140        

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

“section 349(1)” substitute “Chapter 6 of Part 15 of ITA 2007 (deduction from

annual payments and patent royalties)”.

141        

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

142        

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

section 348)”.

143        

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

the end insert “(see section 1004 of ITA 2007)”.

144        

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

10

145        

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

146   (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 952 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

147        

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

UK resident).

148   (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

149        

Omit sections 690 to 694.

150        

Omit section 698A.

151        

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

for “lower rate” substitute “savings rate”.

152        

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

540

 

153        

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

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

TAX”.

154   (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”.

155   (1)  

Amend section 704 (the prescribed circumstances) as follows.

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      (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”,

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(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

541

 

      (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 687 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

20

(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”.

156   (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”.

157   (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

158        

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

542

 

159   (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

160        

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

161   (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””.

162        

Omit sections 710 to 727A (accrued income scheme).

163   (1)  

Amend section 728 (information) as follows.

      (2)  

In subsection (1) for “sections 710 to 727A” substitute “Part 12 of ITA 2007

25

(accrued income profits)”.

      (3)  

In subsection (2) omit the words from “In relation to transactions before” to

the end.

      (4)  

In subsection (5) for “sections 710 to 727A” substitute “Part 12 of ITA 2007

(accrued income profits)”.

30

      (5)  

After subsection (8) insert—

“(9)   

In this section “securities” has the meaning given by section 619 of

ITA 2007.”

164   (1)  

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

of securities) as follows.

35

      (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

(b)   

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

40

165   (1)  

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

 

 

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

543

 

      (2)  

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

“means United Kingdom equities, United Kingdom securities or overseas

securities”.

      (3)  

After subsection (3) insert—

“(3A)   

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

5

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

paragraph 1(1) of Schedule 23A.”

166   (1)  

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

securities) as follows.

      (2)  

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

10

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

      (3)  

After subsection (7) insert—

“(7A)   

The excepted provisions are—

(a)   

this section,

(b)   

section 730A,

15

(c)   

section 737A,

(d)   

section 737C,

(e)   

Chapter 4 of Part 11 of ITA 2007 (deemed manufactured

payments), and

(f)   

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

20

repos).”

167   (1)  

Amend section 731 (application and interpretation of sections 732 to 734) as

follows.

      (2)  

In subsection (2A) after “737A(5)” insert “below or section 602(1) of ITA

2007”.

25

      (3)  

In subsection (9) in the definition of “securities” for “for the purposes of

sections 710 to 728” substitute “within the meaning of Chapter 2 of Part 12 of

ITA 2007 (accrued income profits)”.

168        

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

169        

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

30

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

170        

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

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

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

whether persons are connected is determined in accordance with section

35

839, but”.

171   (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

40

(loan relationships: manufactured interest),”, and

(b)   

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

      (3)  

In subsection (2A)—

(a)   

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

 

 

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

544

 

(b)   

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

172   (1)  

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

arrangements) as follows.

      (2)  

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

Acts”.

5

      (3)  

Omit subsection (8).

      (4)  

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

substitute “section 840ZA”.

173   (1)  

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

manufactured payments) as follows.

10

      (2)  

In subsection (5) —

(a)   

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

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

and

(b)   

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

15

      (3)  

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

relevant person is a company,”.

174   (1)  

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

as follows.

      (2)  

In subsection (7)—

20

(a)   

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

(b)   

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

Finance Act 1996”, and

(c)   

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

      (3)  

Omit subsection (8).

25

      (4)  

For subsection (9) substitute—

“(9)   

Where this subsection applies, the repurchase price of the securities

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).”

30

175        

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

eligible for relief)—

(a)   

after “from” insert “corporation”, and

(b)   

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

176   (1)  

Amend section 737E (power to modify sections 727A, 730A, 730BB and 737A

35

to 737C) as follows.

      (2)  

In subsections (1) and (2) omit “727A,”.

      (3)  

In subsections (4) and (6)(b) omit “or 263D”.

      (4)  

In the sidenote omit “727A,”.

177        

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

40

 

 

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

545

 

178        

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

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

immediately before it.

179   (1)  

Amend section 761 (offshore income gains) as follows.

      (2)  

In subsection (6)—

5

(a)   

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

company”,

(b)   

for “tax” substitute “corporation tax”, and

(c)   

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

      (3)  

After that subsection insert—

10

“(6A)   

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

for offshore income gains accruing to a charitable trust.

(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

15

and immediately reacquired that property for a consideration equal

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

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

20

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

as in the 1992 Act.”

180        

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

domiciled abroad)—

(a)   

in subsection (5)—

25

(i)   

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

“Chapter 2 of Part 13 of ITA 2007 (transfer of assets abroad)”,

and

(ii)   

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

Chapter”, and

30

(b)   

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

of Part 13 of ITA 2007”.

181        

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

35

made the disposal is connected with another person is determined in

accordance with section 839.”

182        

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

activities).

183        

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

40

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

annual payments not to form part of the income of a company for

corporation tax purposes)”.

184   (1)  

Amend section 776 (transactions in land: taxation of capital gains) as follows.

      (2)  

In subsection (1) for “persons” substitute “companies”.

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