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Income Tax Bill


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

553

 

(c)   

the avoidance or reduction of a charge to tax or an assessment

to tax, or

(d)   

the avoidance of a possible assessment to tax.

(2)   

For the purposes of subsection (1)(c) and (d) it does not matter

whether the avoidance or reduction is effected—

5

(a)   

by receipts accruing in such a way that the recipient does not

pay or bear tax on them, or

(b)   

by a deduction in calculating profits or gains.

(3)   

In this section “relief from tax” includes—

(a)   

a tax credit under section 231 for the purposes of corporation

10

tax, and

(b)   

a tax credit under section 397(1) of ITTOIA 2005 for the

purposes of income tax.”

226        

In section 840A(1) (banks)—

(a)   

after “In any provision” insert “of the Corporation Tax Acts”, and

15

(b)   

after paragraph (c) insert—

“(ca)   

the European Investment Bank; or”.

227   (1)  

Amend section 841 (recognised stock exchanges and recognised investment

exchanges) as follows.

      (2)  

For subsections (1) and (2) substitute—

20

“(1)   

In the Corporation Tax Acts “recognised stock exchange” has the

same meaning as in the Income Tax Acts (see section 1005 of ITA

2007).”

      (3)  

In subsection (3) for “Tax Acts” substitute “Corporation Tax Acts”.

228        

In section 842(1) (investment trusts) for “Tax Acts” substitute “Corporation

25

Tax Acts”.

229        

Omit section 842AA (venture capital trusts).

230        

In section 842A(1) (meaning of “local authority) for “Tax Acts” substitute

“Corporation Tax Acts”.

231   (1)  

Amend section 842B (meaning of “investment LLP” and “property

30

investment LLP”) as follows.

      (2)  

In subsection (1)—

(a)   

for “this Act” substitute “the Corporation Tax Acts”, and

(b)   

omit paragraph (a) and the “and” immediately after it.

      (3)  

In subsection (2) omit “an investment LLP or”.

35

      (4)  

In the sidenote omit ““investment LLP” and”.

232   (1)  

Amend Schedule 14 (provisions ancillary to section 266) as follows.

      (2)  

In paragraph 2 after sub-paragraph (1) insert—

   “(1A)  

In sub-paragraph (1)(a) “industrial assurance business” means

any industrial assurance business within the meaning given by—

40

(a)   

section 1(2) of the Industrial Assurance Act 1923, or

 

 

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

554

 

(b)   

Article 3(1) of the Industrial Assurance (Northern Ireland)

Order 1979,

           

which was carried on before 1 December 2001.”

      (3)  

In paragraph 6(1) for “subsections (6) and (7)” substitute “subsection (7)”.

      (4)  

In paragraph 8 after sub-paragraph (3) insert—

5

   “(3A)  

In sub-paragraph (3) “industrial assurance business” means any

industrial assurance business within the meaning given by—

(a)   

section 1(2) of the Industrial Assurance Act 1923, or

(b)   

Article 3(1) of the Industrial Assurance (Northern Ireland)

Order 1979,

10

           

which was carried on before 1 December 2001.”

233        

In Part 1 of Schedule 15 (qualifying policies for the purposes of section 267)

after paragraph 20 insert—

“Meaning of “industrial assurance business”

20A        

In this Part of this Schedule “industrial assurance business” means

15

any industrial assurance business within the meaning given by—

(a)   

section 1(2) of the Industrial Assurance Act 1923, or

(b)   

Article 3(1) of the Industrial Assurance (Northern Ireland)

Order 1979,

           

which was carried on before 1 December 2001.”

20

234        

Omit Part 1 of Schedule 15B (venture capital trusts: relief from income tax).

235        

Omit Schedule 16 (collection of income tax on company payments).

236        

In paragraph 2(b) of Schedule 19B (petroleum extraction activities:

exploration expenditure supplement) after “section 837B” insert “of this Act

and section 1003 of ITA 2007”.

25

237   (1)  

Amend Schedule 20 (charities: qualifying investments and loans) as follows.

      (2)  

In paragraph 8 for the words from “for corporation tax” to the end substitute

“section 56(5)”.

      (3)  

In paragraph 9(1) for “charity”, in both places where it occurs, substitute

“charitable company”.

30

      (4)  

In paragraph 10(1)—

(a)   

in paragraph (b) for “charity”, in both places where it occurs,

substitute “charitable company”, and

(b)   

in paragraph (d) for “charity”, in both places where it occurs,

substitute “charitable company”.

35

      (5)  

In the heading for “Charities” substitute “Charitable companies”.

238   (1)  

Amend Schedule 23A (manufactured dividends and interest) as follows.

      (2)  

In paragraph 1(1)—

(a)   

omit the definition of “interest manufacturer”,

(b)   

in the definition of “manufactured dividend”, “manufactured

40

interest” and “manufactured overseas dividend” omit “,

“manufactured interest”” and “, 3”, and

 

 

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

555

 

(c)   

after that definition insert—

““manufactured interest” means an amount—

(a)   

which is representative of a periodical

payment of interest on United Kingdom

securities, and

5

(b)   

which, under a contract or other

arrangements for the transfer of the securities,

one of the parties is required to pay to the

other;”.

      (3)  

In paragraph 2 (manufactured dividends on UK equities: general)—

10

(a)   

in sub-paragraph (2) before “Tax” insert “Corporation”,

(b)   

in sub-paragraph (3)(b) before “Tax” insert “Corporation”,

(c)   

omit sub-paragraph (3)(c) and the “and” immediately before it,

(d)   

in sub-paragraph (6)(a) omit “to which sub-paragraph (3) above

applies”,

15

(e)   

in sub-paragraph (6) after paragraph (a) insert “, and

(aa)   

the dividend manufacturer is a non-UK resident

company within the charge to corporation tax,”,

and

(f)   

in sub-paragraph (7)(c) after “sub-paragraph (3)(b) above” insert “or

20

section 573(2) of ITA 2007”.

      (4)  

Omit paragraphs 2A to 3A (deductibility of manufactured payment in case

of manufacturer of UK equities; manufactured interest on UK securities:

general; and manufactured interest on gilt-edged securities etc).

      (5)  

In paragraph 4 (manufactured overseas dividends)—

25

(a)   

omit sub-paragraphs (2) to (3B),

(b)   

in sub-paragraph (4)—

(i)   

for “sub-paragraph (2) above” substitute “section 922(2) of

ITA 2007 (amount of income tax to be deducted at source)”,

(ii)   

for “sub-paragraph (3) above” substitute “section 923 of that

30

Act (income tax to be accounted for and paid)”,

(iii)   

for “Tax Acts” substitute “Corporation Tax Acts”,

(iv)   

omit the words from “as they apply” to “branch or agency in

the United Kingdom”,

(v)   

in paragraph (a) for “persons” substitute “companies”, for

35

“him” substitute “the recipient” and for “under sub-

paragraph (2) above” substitute “under section 922(2) of ITA

2007”, and

(vi)   

in paragraph (b) for “persons” substitute “companies” and

for “him” substitute “the recipient”,

40

(c)   

in sub-paragraph (5) omit paragraph (a),

(d)   

omit sub-paragraph (6),

(e)   

omit sub-paragraphs (7) and (7AA), and

(f)   

in sub-paragraph (9) before “Tax” insert “Corporation”.

      (6)  

In paragraph 7 (irregular manufactured payments)—

45

(a)   

in sub-paragraph (1)—

(i)   

omit “manufactured interest or”,

(ii)   

omit “3 or”,

 

 

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

556

 

(iii)   

omit “interest or”,

(iv)   

omit “, as the case may be” where it occurs for the first time,

(v)   

omit “, 3(1)”,

(vi)   

for “Tax Acts” substitute “Corporation Tax Acts”, and

(vii)   

for “paragraphs 2 or 3” substitute “paragraph 2”,

5

(b)   

in sub-paragraph (1A) omit “manufactured interest or”,

(c)   

in sub-paragraph (3)—

(i)   

for “Tax Acts” substitute “Corporation Tax Acts”,

(ii)   

omit “3(1) or”,

(iii)   

omit “manufactured interest or”, and

10

(iv)   

omit “3 or”, and

(d)   

in sub-paragraph (4)(b) omit “or set off” and “income or”.

      (7)  

In paragraph 7A(10) for the definition of “tax advantage” substitute—

““tax advantage” has the meaning given by section 840ZA;”.

      (8)  

In paragraph 8 (dividend manufacturing regulations: general)—

15

(a)   

in sub-paragraph (1)—

(i)   

omit “, manufactured interest” in both places where it occurs,

(ii)   

omit “, interest manufacturers”,

(iii)   

for “2 to 4” substitute “2 and 4”, and

(iv)   

before “Tax Acts” insert “Corporation”,

20

(b)   

in sub-paragraph (1A)—

(i)   

before “Tax Acts” insert “Corporation”, and

(ii)   

omit “or the 1992 Act”,

(c)   

in sub-paragraph (2)—

(i)   

omit paragraphs (c) and (d),

25

(ii)   

omit “or to”, and

(iii)   

omit “, manufactured interest or manufactured overseas

dividends”,

(d)   

omit sub-paragraph (2A), and

(e)   

in sub-paragraph (3)—

30

(i)   

in paragraph (a) after “apply” insert “for corporation tax

purposes”, and

(ii)   

omit paragraph (b).

239        

In Schedule 28AA (provision not at arm’s length) in paragraph 5(7) for

paragraphs (a) and (b) substitute—

35

“(a)   

disregarded income within the meaning given by section

813 of ITA 2007 (limits on liability to income tax of non-UK

residents), or

(b)   

disregarded company income within the meaning given

by section 816 of that Act.”

40

240        

Omit Schedule 28B (venture capital trusts: meaning of “qualifying holding”).

 

 

Income Tax Bill
Schedule 1 — Minor and consequential amendments
Part 2 — Other enactments

557

 

Part 2

Other enactments

Chevening Estate Act 1959 (c. 49)

241        

In section 2(1A)(a) of the Chevening Estate Act 1959 (provisions as to income

tax, estate duty and stamp duty) for “section 505(1A) of the Income and

5

Corporation Taxes Act 1988” substitute “section 533(2) of the Income Tax Act

2007”.

Taxes Management Act 1970 (c. 9)

242        

The Taxes Management Act 1970 is amended as follows.

243        

In section 6(1) (declarations on taking office) at the end of paragraph (c) add

10

“or section 704 of ITA 2007”.

244        

In section 7(6) (notice of liability to income tax and capital gains tax) for

“lower rate” substitute “savings rate”.

245   (1)  

Amend section 12AB(1) (partnership return to include partnership

statement) as follows.

15

      (2)  

In paragraph (a)—

(a)   

insert the word “and” at the end of sub-paragraph (ii), and

(b)   

omit sub-paragraph (iv) and the “and” immediately before it.

      (3)  

In paragraph (b) for “tax, credit or charge” substitute “tax or credit”.

246        

In section 12B(4A)(a) (records to be kept for purposes of returns) for sub-

20

paragraph (ii) substitute—

“(ii)   

section 495(1) or 975(2) or (4) of ITA 2007 (statements

about deduction of income tax),”.

247   (1)  

Amend section 17 (interest paid or credited by banks etc without deduction

of income tax or after deduction of income tax) as follows.

25

      (2)  

In subsection (1) after “bank” insert “or building society”.

      (3)  

In subsection (1A) for “section 840A of the principal Act” substitute “section

991 of ITA 2007”.

      (4)  

After subsection (6) insert—

“(7)   

In the application of this section in relation to building societies,

30

references to interest include references to dividends.

   

For this purpose “dividend” includes any distribution (whether or

not described as a dividend).”

      (5)  

In the sidenote after “banks” insert “, building societies”.

248        

In section 21(5A) (transactions in securities etc) for “Schedule 23A to the

35

principal Act” substitute “Chapter 2 of Part 11 or Chapter 9 of Part 15 of ITA

2007”.

249        

In section 24(3A) (power to obtain information as to income from securities)

for “section 840A of the principal Act” substitute “section 991 of ITA 2007”.

 

 

Income Tax Bill
Schedule 1 — Minor and consequential amendments
Part 2 — Other enactments

558

 

250        

In section 31C(2)(b) (appeals: appeals to Special Commissioners) for “section

350 of the principal Act” substitute “section 963(3) of ITA 2007.

251        

In section 36(3A) (fraudulent or negligent conduct)—

(a)   

after “section 257BA of the principal Act” insert “or “any of sections

47 to 49 of ITA 2007”, and

5

(b)   

for “(elections as to transfer of married couple’s allowance)”

substitute “(tax reductions for married couples and civil partners:

elections to transfer relief)”.

252   (1)  

Amend section 37A (effect of assessment where allowances transferred) as

follows.

10

      (2)  

For “income tax reduction or deduction from total income” in both places

where it occurs substitute “deduction from net income or tax reduction”.

      (3)  

After “spouse” insert “or civil partner”.

      (4)  

After “the principal Act” insert “or section 39, 51 or 52 of ITA 2007”.

253        

In section 42(7) (procedure for making claims etc)—

15

(a)   

in paragraph (a) omit “723(3),”,

(b)   

omit “and” at the end of paragraph (d), and

(c)   

after paragraph (e) insert “and

(f)   

sections 668 and 669 of ITA 2007.”

254        

In section 43A(2A) (further assessments: claims etc)—

20

(a)   

in paragraph (a) after “section 257BA of the principal Act” insert “or

any of sections 47 to 49 of ITA 2007”,

(b)   

in paragraph (a) for “(election as to transfer of married couple’s

allowance)” substitute “(tax reductions for married couples and civil

partners: elections to transfer relief)”, and

25

(c)   

in paragraph (b) for “that Act” substitute “the principal Act”.

255   (1)  

Amend section 46B (questions to be determined by Special Commissioners)

as follows.

      (2)  

In subsection (4)—

(a)   

in paragraph (c) for “sections 740 and 743(1) of the principal Act”

30

substitute “sections 720, 727 and 731 of ITA 2007”, and

(b)   

in paragraph (d) for “of that Act” substitute “of the principal Act”.

      (3)  

In subsection (5) after paragraph (d) insert “, or

(e)   

section 1013 of ITA 2007,”.

256   (1)  

Amend section 46C as follows.

35

      (2)  

In subsection (1)(b) omit “of the principal Act”.

      (3)  

In subsection (3)—

(a)   

omit “of the principal Act”,

(b)   

in paragraph (b) after “460” insert “of the principal Act”,

(c)   

in paragraph (c) after “467” insert “of the principal Act”,

40

(d)   

in paragraph (d) for “sections 527 and 536 (reliefs in respect of

royalties)” substitute “527 of the principal Act (spreading of patent

royalty receipts)”,

(e)   

in paragraph (e) after “Part XVIII” insert “of the principal Act”, and

 

 

Income Tax Bill
Schedule 1 — Minor and consequential amendments
Part 2 — Other enactments

559

 

(f)   

after that paragraph insert—

“(f)   

Part 10 of ITA 2007 (charitable trusts: claims for

exemption);

(g)   

sections 461 and 908 of ITA 2007 (reliefs in respect of

royalties).”

5

257        

In section 55(1) (recovery of tax not postponed)—

(a)   

omit paragraph (c), and

(b)   

in paragraph (d) for “that Act” substitute “the principal Act”.

258        

For section 87 (interest on income tax on company payments) substitute—

“87     

Interest on overdue income tax deducted at source

10

(1)   

Income tax which is assessable under Chapter 15 of Part 15 of ITA

2007 carries interest at the rate applicable under section 178 of the

Finance Act 1989 from the date when it was due under section 951 of

ITA 2007 until payment.

(2)   

Subsection (1) applies—

15

(a)   

whether or not an assessment is made, and

(b)   

whether or not income tax which is assessed has been paid

when the assessment is made.

(3)   

Subsection (1) applies even if the date when the income tax should

have been paid is a non-business day as defined by section 92 of the

20

Bills of Exchange Act 1882.

(4)   

Subsection (5) applies to any income tax which—

(a)   

was payable under Chapter 15 of Part 15 of ITA 2007

(collection: deposit-takers, building societies and certain

companies) in respect of payments within section 946 of that

25

Act made in a return period,

(b)   

was not paid on the date when it was due under section 951

of that Act, and

(c)   

has subsequently been discharged or repaid under section

953 of that Act because the person who made the payments

30

received payments on which it suffered income tax by

deduction in a later return period.

(5)   

The income tax carries interest under subsection (1) from the date

when it was due under section 951 of ITA 2007 until the earliest of—

(a)   

the date when the income tax was paid,

35

(b)   

the date when the person delivered a return for the later

return period, and

(c)   

the expiry of 14 days after the end of that period,

   

but subsection (1) does not otherwise apply to the income tax.

(6)   

In this section “return period” means a period for which a return is

40

required to be made under Chapter 15 of Part 15 of ITA 2007.”

259        

In section 91(3)(c) (effect on interest of reliefs) for “lower rate” substitute

“savings rate”.

260   (1)  

Amend section 98 (special returns etc) as follows.

 

 

 
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