Income Tax Bill

House of Commons

Session 2006 - 07
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Other Bills before Parliament

Income Tax Bill

Income Tax Bill
Schedule 1 — Minor and consequential amendments
Part 2 — Other enactments
560

      (2)
In subsection (4A)(a) for “section 350(1) of, or Schedule 16 to, the principal
Act” substitute “Chapter 15 or 16 of Part 15 of ITA 2007”.
      (3)
In subsection (4B) for paragraphs (a) to (d) substitute—
“(a)
the payment is made by a company, local authority or
qualifying partnership (within the meaning of section 932 of
5
ITA 2007) without an amount representing income tax on the
payment being deducted from it,
(b)
at the time the payment is made, the company, authority or
partnership—
(i)
does not believe that the payment is an excepted
10
payment for the purposes of Chapter 11 of Part 15 of
ITA 2007 (payments between companies etc:
exception from duties to deduct), or
(ii)
if it does so believe, cannot reasonably do so,
(c)
the payment is one from which tax is deductible under Part
15
15 of ITA 2007 unless the company, authority or partnership
reasonably believes that it is an excepted payment for the
purposes of Chapter 11 of that Part, and
(d)
the payment is not an excepted payment at the time the
payment is made.”
20
      (4)
Omit subsection (4C).
      (5)
For subsection (4D) substitute—
“(4D)
A payment is within this subsection if—
(a)
it is a payment from which a sum representing income tax
must be deducted under Chapter 6 (deduction from annual
25
payments and patent royalties) or 7 (deduction from other
payments connected with intellectual property) of Part 15 of
ITA 2007,
(b)
a company, purporting to rely on section 911 of that Act
(double taxation arrangements: deduction at treaty rate),
30
deducts less from the payment than required by those
Chapters, and
(c)
at the time the payment is made the payee (as defined in
section 913 of that Act) is not entitled to relief under double
taxation arrangements (as defined in section 1023 of that Act)
35
and the company—
(i)
does not believe that it is entitled to such relief, or
(ii)
if it does so believe, cannot reasonably do so.”
      (6)
For subsection (4DA) substitute—
“(4DA)
A payment is within this subsection if—
40
(a)
it is a payment from which a sum representing income tax
must be deducted under Chapter 6 (deduction from annual
payments and patent royalties) or 7 (deduction from other
payments connected with intellectual property) of Part 15 of
ITA 2007,
45
(b)
a company, purporting to rely on section 914 of ITA 2007 (EU
companies: discretion to make payment gross), makes the
payment without deducting a sum representing income tax,
and

Income Tax Bill
Schedule 1 — Minor and consequential amendments
Part 2 — Other enactments
561

(c)
at the time the payment is made the payment is not exempt
from income tax as a result of section 758 of ITTOIA 2005
(exemption for certain interest and royalty payments) and the
company—
(i)
does not believe that the payment is so exempt, or
5
(ii)
if it does so believe, cannot reasonably do so.”
      (7)
In subsection (4E)(b) for “section 349(2)” substitute “section 874 of ITA
2007”.
      (8)
In the first column of the Table—
(a)
omit the entry relating to regulations under section 42A of ICTA,
10
(b)
omit the entry relating to regulations under section 476(1) of ICTA,
(c)
omit the entry relating to regulations under section 477A(1) of ICTA,
(d)
omit the entry relating to section 482(3) of ICTA,
(e)
omit the entry relating to regulations under section 482(11) of ICTA,
(f)
omit the entry relating to section 483 of ICTA,
15
(g)
omit the entry relating to regulations under section 555(7) of ICTA,
(h)
omit the entry relating to section 745(1) of ICTA,
(i)
omit the entry relating to paragraph 5(2) of Schedule 15B to ICTA,
(j)
omit the entry relating to regulations under paragraph 11B(5) of
Schedule 28B to ICTA,
20
(k)
omit the entry relating to section 86(12) of FA 1995,
(l)
omit the entry relating to regulations under Schedule 33 to FA 2002,
and
(m)
at the end insert—
“sections 242 and 243(1) and (2) of ITA 2007;
25
section 271(2) of ITA 2007;
regulations under Chapter 5 of Part 6 of ITA 2007;
regulations under section 330(5) of ITA 2007;
section 703 of ITA 2007;
section 748(1) and (2) of ITA 2007;
30
section 771 of ITA 2007;
section 788 of ITA 2007;
section 862 of ITA 2007;
regulations under section 871(1) of ITA 2007;
regulations under section 969(1) of ITA 2007;
35
regulations under section 971(1) of ITA 2007;
paragraph 155(5) of Schedule 2 to ITA 2007.”
      (9)
In the second column of the Table—
(a)
omit the entry relating to regulations under section 42A of ICTA,
(b)
omit the entry relating to section 350(1) of ICTA,
40
(c)
omit the entry relating to regulations under section 476(1) of ICTA,
(d)
omit the entry relating to regulations under section 477A(1) of ICTA,
(e)
omit the entry relating to section 482(2) of ICTA,
(f)
omit the entry relating to regulations under section 482(11) of ICTA,
(g)
omit the entry relating to regulations under section 555(7) of ICTA,
45
(h)
omit the entry relating to paragraph 5(1) of Schedule 15B to ICTA,
(i)
omit the entry relating to Schedule 16 to ICTA,

Income Tax Bill
Schedule 1 — Minor and consequential amendments
Part 2 — Other enactments
562

(j)
omit the entry relating to regulations under Schedule 33 to FA 2002,
(k)
omit the entry relating to regulations under section 122 of FA 2006,
and
(l)
at the end insert—
“sections 240 and 241 of ITA 2007;
5
section 271(1) of ITA 2007;
regulations under Chapter 5 of Part 6 of ITA 2007;
section 373 of ITA 2007;
regulations under section 871(1) of ITA 2007;
Chapter 15 of Part 15 of ITA 2007;
10
Chapter 16 of Part 15 of ITA 2007;
regulations under section 969(1) of ITA 2007;
regulations under section 971(1) of ITA 2007;
regulations under section 973(1) of ITA 2007.”
     (10)
After the paragraph at the end of the Table insert—
15

“References in this Table to sections 240, 241, 242 and 243(1) and (2)
of ITA 2007 are to provisions that apply only in relation to shares
issued after 5 April 2007.”
261
In section 99A (certificates of non-liability to income tax) for “section 477A
of the principal Act (building societies) or section 480B of that Act (deposit-
20
takers)” substitute “section 852 of ITA 2007”.
262
After section 99A insert—
“99B
Declarations under Chapter 2 of Part 15 of ITA 2007
Where a person fraudulently or negligently gives any incorrect
information in a declaration under any of sections 858 to 861 of ITA
25
2007, the person shall be liable to a penalty not exceeding £3,000.”
263
In section 118(1) (interpretation)—
(a)
in the definition of “company” for “section 832(1) of the principal Act
(with section 468 of that Act)” substitute “section 992(1) of ITA 2007
(with section 468 of the principal Act)”, and
30
(b)
after the definition of “ITTOIA 2005” insert—
““ITA 2007” means the Income Tax Act 2007,”.
264
In paragraph 9(2) of Schedule 1A (claims etc not included in returns)—
(a)
in paragraph (a) for “(personal reliefs for non-residents)” substitute
“or section 56 or 460 of ITA 2007 (residence etc of claimants)”, and
35
(b)
in paragraph (c) for “of that Act” substitute “of the principal Act”.
Finance Act 1971 (c. 68)
265
Omit section 21 of, and Schedule 3 to, the Finance Act 1971 (occupational
pension schemes).
Biological Standards Act 1975 (c. 4)
40
266
In section 2(4A)(a) of the Biological Standards Act 1975 (general provisions
about the Board) for “section 505(1A) of the Income and Corporation Taxes
Act 1988” substitute “section 533(2) of the Income Tax Act 2007”.

Income Tax Bill
Schedule 1 — Minor and consequential amendments
Part 2 — Other enactments
563

House of Commons Disqualification Act 1975 (c. 24)
267
In Part 3 of Schedule 1 to the House of Commons Disqualification Act 1975
(offices disqualifying for membership: other disqualifying offices) after
“section 706 of the Income and Corporation Taxes Act 1988” insert “or
section 704 of the Income Tax Act 2007”.
5
Inheritance Tax Act 1984 (c. 51)
268
The Inheritance Tax Act 1984 is amended as follows.
269
In section 157(6) (non-residents’ bank accounts) for “section 840A of the
Taxes Act 1988” substitute “section 991 of the Income Tax Act 2007”.
270
In section 204(5) (limitation of liability) for “section 739 or 740 of the Taxes
10
Act 1988” substitute “Chapter 2 of Part 13 of the Income Tax Act 2007”.
271
In section 272 (general interpretation) in the definition of “authorised unit
trust” for the words from “section 469” to “section)” substitute “the Income
Tax Acts (see section 1007 of the Income Tax Act 2007)”.
Administration of Justice Act 1985 (c. 61)
15
272
In paragraph 36(3) of Schedule 2 to the Administration of Justice Act 1985—
(a)
for “sections 745(3) and” substitute “section”, and
(b)
after “1988” insert “and sections 749, 771(5) and (6) and 788(5) and (6)
of the Income Tax Act 2007”.
Building Societies Act 1986 (c. 53)
20
273
In section 8(9) of the Building Societies Act 1986 (raising funds and
borrowing) for “482(6) of the Income and Corporation Taxes Act 1988”
substitute “866(2) and (3) of the Income Tax Act 2007”.
Finance Act 1988 (c.39)
274
The Finance Act 1988 is amended as follows.
25
275   (1)
Amend section 130 (provisions for securing payment by company of
outstanding tax) as follows.
      (2)
In subsection (7)—
(a)
in paragraph (a), for “203 of the Taxes Act 1988” substitute “684 of the
Income Tax (Earnings and Pensions) Act 2003”,
30
(b)
in paragraph (b), for “to which section 350(4)(a) of that Act (company
payments which are not distributions) applies” substitute “within
section 946 of the Income Tax Act 2007 (collection of tax: deposit-
takers, building societies and certain companies)”, and
(c)
in paragraph (c)—
35
(i)
omit sub-paragraphs (i) and (ii) and the “or” immediately
before sub-paragraph (iii), and
(ii)
in sub-paragraph (iii) for “555 of that Act” substitute “966 of
the Income Tax Act 2007”.

Income Tax Bill
Schedule 1 — Minor and consequential amendments
Part 2 — Other enactments
564

      (3)
After subsection (9) insert—
“(9A)
In this section any reference to a provision of the Income Tax
(Earnings and Pensions) Act 2003 or the Income Tax Act 2007 shall be
construed, in relation to any time at which a corresponding
provision of the Taxes Act 1988 or an enactment repealed by that Act
5
had effect, as a reference to that corresponding provision.”
276
In Schedule 6 (commercial woodlands) omit paragraph 3(3) to (5).
277
In paragraph 6(1)(b) of Schedule 12 (building societies: change of status) for
the words from “section 477A” to the end substitute “Chapter 2 of Part 15 of
the Income Tax Act 2007 (deduction of income tax at source: deposit-takers
10
and building societies)”.
Finance Act 1989 (c. 26)
278
The Finance Act 1989 is amended as follows.
279
In section 88(1) (corporation tax: policy holders’ fraction of profits) for
“lower rate” substitute “savings rate”.
15
280
In section 111 (residence of personal representatives)—
(a)
omit subsections (1) to (3) and (6) to (8), and
(b)
in subsection (5) omit the words “Subject to subsections (6) to (8)
below,”.
281   (1)
Amend section 151 (assessment of trustees and personal representatives) as
20
follows.
      (2)
In subsection (2)(a) omit the words from “other” to “2005,”.
      (3)
Omit subsection (2)(b) and the “and” immediately before it .
      (4)
Omit subsection (3).
282
In section 182(3) (disclosure of information) at the end of paragraph (d)
25
insert “or section 704 of the Income Tax Act 2007”.
283   (1)
Amend Schedule 5 (employee share ownership trusts) as follows.
      (2)
In paragraph 15 for “section 840 of the Taxes Act 1988” substitute “section
995 of the Income Tax Act 2007”.
      (3)
In paragraph 16(2)—
30
(a)
in paragraph (b) for “section 840 of that Act” substitute “section 995
of the Income Tax Act 2007”, and
(b)
in paragraph (c) for “that Act” substitute “the Taxes Act 1988”.
Finance Act 1990 (c.29)
284   (1)
Amend section 25 of the Finance Act 1990 (c. 29) (donations to charity by
35
individuals) as follows.
      (2)
Omit subsections (1) to (9A), (11) and (13).
      (3)
In subsection (10)—
(a)
for “charity”, in both places where it occurs, substitute “charitable
company”,
40

Income Tax Bill
Schedule 1 — Minor and consequential amendments
Part 2 — Other enactments
565

(b)
after “donation” insert “for the purposes of Chapter 2 of Part 8 of the
Income Tax Act 2007 (gift aid)”, and
(c)
for “Tax Acts” substitute “Corporation Tax Acts”.
      (4)
In subsection (12)(a) for “charity” substitute “charitable company”.
Finance Act 1991 (c.31)
5
285
The Finance Act 1991 (c. 31) is amended as follows.
286
Omit section 53 (Income Tax (Building Society) Regulations 1986).
287
Omit section 72 (deduction of trading losses).
Social Security Contributions and Benefits Act 1992 (c.4)
288
The Social Security Contributions and Benefits Act 1992 (c. 4) is amended as
10
follows.
289
In section 4A(3)(i)(i) (earnings of workers supplied by service companies etc)
for “section 839 of the Income and Corporation Taxes Act 1988” substitute
“section 993 of the Income Tax Act 2007”.
290   (1)
Amend Schedule 2 (levy of Class 4 contributions with income tax) as
15
follows.
      (2)
In paragraph 1 after paragraph (ab) insert—
“(ac)
“ITA 2007” means the Income Tax Act 2007;”.
      (3)
In paragraph 3—
(a)
in sub-paragraph (1)—
20
(i)
for “the Act of 1988” substitute “ITA 2007”,
(ii)
in paragraph (a) for “sections 380 and 381” substitute
“sections 64 and 72”,
(iii)
in paragraph (c) for “section 385” substitute “section 83”, and
(iv)
in paragraph (d) for “sections 388 and 389” substitute “section
25
89”,
(b)
in sub-paragraph (2)—
(i)
omit “of the Act of 1988”,
(ii)
in paragraph (a) after “Chapter I of Part VII” insert “of the Act
of 1988 and Chapters 2 and 3 of Part 3 and sections 457, 458
30
and 459 of ITA 2007”,
(iii)
in paragraph (b) for “section 353” substitute “section 383 of
ITA 2007”,
(iv)
omit paragraph (c), and
(v)
in paragraph (d) for “section 390” substitute “sections 88 and
35
94 of ITA 2007”,
(c)
in sub-paragraph (4) for “total income” substitute “net income”,
(d)
in sub-paragraph (5)—
(i)
omit paragraph (a), and
(ii)
in paragraph (b) for “section 353 of that Act” substitute
40
“section 383 of ITA 2007”.
      (4)
In paragraph 9(4) for “section 832 of the Act of 1988” substitute “section 989
of ITA 2007”.

Income Tax Bill
Schedule 1 — Minor and consequential amendments
Part 2 — Other enactments
566

Social Security Contributions and Benefits (Northern Ireland) Act 1992 (c.7)
291
The Social Security Contributions and Benefits (Northern Ireland) Act 1992
is amended as follows.
292
In section 4A(3)(i)(i) (earnings of workers supplied by service companies etc)
for “section 839 of the Income and Corporation Taxes Act 1988” substitute
5
“section 993 of the Income Tax Act 2007”.
293   (1)
Amend Schedule 2 (Schedule 2 to the Social Security Contributions and
Benefits Act 1992: levy of Class 4 contributions with income tax) as follows.
      (2)
In paragraph 1 after paragraph (ab) insert—
“(ac)
“ITA 2007” means the Income Tax Act 2007;”.
10
      (3)
In paragraph 3—
(a)
in sub-paragraph (1)—
(i)
for “the Act of 1988” substitute “ITA 2007”,
(ii)
in paragraph (a) for “sections 380 and 381” substitute
“sections 64 and 72”,
15
(iii)
in paragraph (c) for “section 385” substitute “section 83”, and
(iv)
in paragraph (d) for “sections 388 and 389” substitute “section
89”,
(b)
in sub-paragraph (2)—
(i)
omit “of the Act of 1988”,
20
(ii)
in paragraph (a) after “Chapter I of Part VII” insert “of the Act
of 1988 and Chapters 2 and 3 of Part 3 and sections 457, 458
and 459 of ITA 2007”,
(iii)
in paragraph (b) for “section 353” substitute “section 383 of
ITA 2007”,
25
(iv)
omit paragraph (c), and
(v)
in paragraph (d) for “section 390” substitute “sections 88 and
94 of ITA 2007”,
(c)
in sub-paragraph (4) for “total income” substitute “net income”,
(d)
in sub-paragraph (5)—
30
(i)
omit paragraph (a), and
(ii)
in paragraph (b) for “section 353 of that Act” substitute
“section 383 of ITA 2007”.
      (4)
In paragraph 9(4) for “section 832 of the Act of 1988” substitute “section 989
of ITA 2007”.
35
Taxation of Chargeable Gains Act 1992 (c. 12)
294
The Taxation of Chargeable Gains Act 1992 is amended as follows.
295   (1)
Amend section 4 (rates of capital gains tax) as follows.
      (2)
In subsection (1) for “lower rate” substitute “savings rate”.
      (3)
In subsection (1AA) for “rate applicable to trusts under section 686 of the
40
Taxes Act” substitute “trust rate”.