Income Tax Bill

House of Commons

Session 2006 - 07
Internet Publications
Other Bills before Parliament

Income Tax Bill

Income Tax Bill
Schedule 1 — Minor and consequential amendments
Part 2 — Other enactments
608

(b)
in paragraph (b) for “that section” substitute “section 353 of ICTA”.
433
In section 230(5)(a) (the approved amount for mileage allowance payments)
for “section 840 of ICTA” substitute “section 995 of ITA 2007”.
434
In section 329(6) (deductions from earnings not to exceed earnings) for
“section 380 of ICTA” substitute “section 128 of ITA 2007”.
5
435
In section 347(2) (payments made after leaving an employment) for “from
total income” substitute “in calculating net income”.
436
In section 357(2) after “section 505(1)(e) of ICTA” insert “or section 524 of
ITA 2007”.
437
After section 404 insert—
10
“404A
Amounts charged to be treated as highest part of total income
(1)
A payment or other benefit which counts as a person’s employment
income as a result of section 403 is treated as the highest part of the
person’s total income.
(2)
Subsection (1) has effect for all income tax purposes except the
15
purposes of sections 535 to 537 of ITTOIA 2005 (gains from contracts
for life insurance etc: top slicing relief).
(3)
See section 1012 of ITA 2007 (relationship between highest part rules)
for the relationship between—
(a)
the rule in subsection (1), and
20
(b)
other rules requiring particular income to be treated as the
highest part of a person’s total income.”
438
In section 476 (charge on occurrence of chargeable event) after subsection (5)
insert—
“(5A)
An amount charged under subsection (5)(a) is treated for income tax
25
purposes as an amount of income.”
439   (1)
Amend section 515 (tax advantages and charges relating to SIPs) as follows.
      (2)
In subsection (1)—
(a)
for “provisions of ICTA relate” substitute “provision of ICTA
relates”, and
30
(b)
omit paragraph (b) and the “and” immediately after it.
      (3)
In subsection (2)—
(a)
omit the “and” immediately after paragraph (b), and
(b)
after paragraph (c) insert “, and
(d)
Chapter 5 of Part 9 of ITA 2007 (which provides for
35
section 479 of that Act not to apply to income of the
trustees of an approved SIP in certain
circumstances)”.
      (4)
Omit subsection (3).
440   (1)
Amend section 555 (deduction for liabilities related to former employment)
40
as follows.
      (2)
In subsection (2)—

Income Tax Bill
Schedule 1 — Minor and consequential amendments
Part 2 — Other enactments
609

(a)
for “when computing the former employee’s total income” substitute
“in calculating the former employee’s net income”, and
(b)
at the end insert “(see Step 2 of the calculation in section 23 of ITA
2007)”.
      (3)
For subsection (6) substitute—
5
“(6)
See section 263ZA of TCGA 1992 for relief from capital gains tax
where the amount of the deduction allowed under this section
exceeds the remaining total income (as defined in that section).”
      (4)
In the sidenote for “from total income” substitute “in calculating net
income”.
10
      (5)
In the italic cross-heading before the section for “from total income”
substitute “in calculating net income”.
441
In section 609(1) after “section 273 of ICTA” insert “or section 459 of ITA
2007”.
442
In section 718 (connected persons) for “Section 839 of ICTA” substitute
15
“Section 993 of ITA 2007”.
443
In section 719 (control in relation to a body corporate)—
(a)
for “Section 840 of ICTA (meaning of control in relation to a body
corporate)” substitute “Section 995 of ITA 2007 (meaning of
“control”)”, and
20
(b)
for the sidenote substitute “Meaning of “control””.
444   (1)
Amend section 721 (other definitions) as follows.
      (2)
In subsection (1)—
(a)
after the definition of “foreign employer” insert “and”, and
(b)
omit the words after the definition of “non-cash voucher”.
25
      (3)
Omit subsection (2).
445
In Part 1 of Schedule 1 (abbreviations) in the appropriate place insert—

“ITA 2007
The Income Tax Act 2007”.

446   (1)
Amend Part 2 of Schedule 1 (defined expressions) as follows.
      (2)
In the entry for “assignment (in the application of the Act to Scotland)”, in
30
the second column, for “section 721(2)” substitute “section 1008(1) of ITA
2007”.
      (3)
In the entry for “basic rate”, in the second column, for “section 832(1) of
ICTA” substitute “section 6(2) of ITA 2007 (as applied by section 989 of that
Act)”.
35
      (4)
In the entry for “body of persons”, in the second column, for “section 832(1)
of ICTA” substitute “section 989 of ITA 2007”.
      (5)
In the entry for “capital allowance”, in the second column, for “section 832(1)
of ICTA” substitute “section 989 of ITA 2007”.

Income Tax Bill
Schedule 1 — Minor and consequential amendments
Part 2 — Other enactments
610

      (6)
In the entry for “child, children”, in the second column, omit “section 832(5)
of ICTA, and see”.
      (7)
In the entry for “close company”, in the second column, for “section 832(1)
of ICTA” substitute “section 989 of ITA 2007”.
      (8)
In the entry for “company”, in the second column, for “section 832(1) of
5
ICTA” substitute “section 992 of ITA 2007”.
      (9)
In the entry for “connected”, in the second column, for “section 839 of ICTA”
substitute “section 993 of ITA 2007”.
     (10)
In the entry for “control”, in the second column, for “section 840 of ICTA”
substitute “section 995 of ITA 2007”.
10
     (11)
In the entry for “distribution”, in the second column, for “section 832(1) of
ICTA” substitute “section 989 of ITA 2007”.
     (12)
In the entry for “generally accepted accounting practice”, in the second
column, for “section 832(1) of ICTA” substitute “section 997 of ITA 2007”.
     (13)
Omit the entry for “interest”.
15
     (14)
In the entry for “local authority”, in the second column, for “section 842A of
ICTA” substitute “section 999 of ITA 2007”.
     (15)
After the entry for “national insurance contributions” insert—

“net income
section 23 of ITA 2007

(as applied by section

20

989 of that Act)”

     (16)
In the entry for “the normal self-assessment filing date”, in the second
column, for “section 721(1)” substitute “section 989 of ITA 2007”.
     (17)
In the entry for “notice”, in the second column, for “section 832(1) of ICTA”
substitute “section 989 of ITA 2007”.
25
     (18)
In the entry for “offshore installation”, in the second column, for “section
837C of ICTA” substitute “sections 1001 and 1002 of ITA 2007”.
     (19)
In the entry for “ordinary share capital”, in the second column, for “section
832(1) of ICTA” substitute “section 989 of ITA 2007”.
     (20)
In the entry for “personal representatives”, in the second column, for
30
“section 721(1)” substitute “section 989 of ITA 2007”.
     (21)
In the entry for “recognised stock exchange”, in the second column, for
“section 841 of ICTA” substitute “section 1005 of ITA 2007”.
     (22)
In the entry for “registered pension scheme”, in the second column, for
“section 832(1) of ICTA” substitute “section 150(2) of FA 2004 (as applied by
35
section 989 of ITA 2007)”.
     (23)
In the entry for “Schedule A business”, in the second column, for “section
832(1) of ICTA” substitute “section 989 of ITA 2007”.

Income Tax Bill
Schedule 1 — Minor and consequential amendments
Part 2 — Other enactments
611

     (24)
In the entry for “stepchild”, in the second column, for “section 832(1) of
ICTA” substitute “section 246 of the Civil Partnership Act 2004 (as applied
by section 989 of ITA 2007)”.
     (25)
In the entry for “51% subsidiary”, in the second column, for “section 838(1)
of ICTA” substitute “section 989 of ITA 2007”.
5
     (26)
In the entry for “tax”, in the second column, at the end insert “(as applied by
section 989 of ITA 2007)”.
     (27)
In the entry for “tax credit”, in the second column, for “section 832(1) of
ICTA” substitute “section 397(1) of ITTOIA 2005 (as applied by section 989
of ITA 2007)”.
10
     (28)
In the entry for “tax year”, in the second column, for “section 721(1)”
substitute “section 4(2) of ITA 2007 (as applied by section 989 of that Act)”.
     (29)
In the entry for “the tax year 2003-04 etc”, in the second column, for “section
721(1)” substitute “section 4(4) of ITA 2007 (as applied by section 989 of that
Act)”.
15
     (30)
In the entry for “total income” for “section 835 of ICTA” substitute “section
23 of ITA 2007 (as applied by section 989 of that Act)”.
     (31)
In the entry for “trade”, in the second column, for “section 832(1) of ICTA”
substitute “section 989 of ITA 2007”.
     (32)
In the entry for “United Kingdom”, in the second column, for “section 830 of
20
ICTA” substitute “section 1013 of ITA 2007”.
     (33)
In the entry for “UK property business”, in the second column, omit “section
832(1) of ICTA and” and at the end insert “(as applied by section 989 of ITA
2007)”.
447   (1)
Amend Schedule 2 (approved share incentive plans) as follows.
25
      (2)
In paragraph 49(3)—
(a)
in paragraph (a) for “section 840A(1)(b) of ICTA” substitute “section
991(2)(b) of ITA 2007”, and
(b)
in paragraph (c) for “section 840A(1)(c) of ICTA” substitute “section
991(2)(c) of ITA 2007”.
30
      (3)
In paragraph 100—
(a)
in the entry for “building society”, in the second column, for “section
832(1) of ICTA” substitute “section 989 of ITA 2007”,
(b)
in the entry for “child”, in the second column, for “section 832(5) of
ICTA (and see section 721(6))” substitute “section 721(6)”,
35
(c)
in the entry for “close company”, in the second column, for “section
832(1) of ICTA” substitute “section 989 of ITA 2007”,
(d)
in the entry for “distribution”, in the second column, for “section
832(1) of ICTA” substitute “section 989 of ITA 2007”,
(e)
in the entry for “notice”, in the second column, for “section 832(1) of
40
ICTA” substitute “section 989 of ITA 2007”,
(f)
in the entry for “ordinary share capital”, in the second column, for
“section 832(1) of ICTA” substitute “section 989 of ITA 2007”,
(g)
in the entry for “personal representatives”, in the second column, for
“section 721(1)” substitute “section 989 of ITA 2007”,
45

Income Tax Bill
Schedule 1 — Minor and consequential amendments
Part 2 — Other enactments
612

(h)
in the entry for “recognised stock exchange”, in the second column,
for “section 841 of ICTA” substitute “section 1005 of ITA 2007”,
(i)
in the entry for “tax”, in the second column, at the end insert “(as
applied by section 989 of ITA 2007)”, and
(j)
in the entry for “tax year”, in the second column, for “section 721(1)”
5
substitute “section 4(2) of ITA 2007 (as applied by section 989 of that
Act)”.
448
In paragraph 49 of Schedule 3 (approved SAYE Option Schemes)—
(a)
in the entry for “child”, in the second column, for “section 832(5) of
ICTA (and see section 721(6) of this Act)” substitute “section 721(6)”,
10
(b)
in the entry for “close company”, in the second column, for “section
832(1) of ICTA” substitute “section 989 of ITA 2007”,
(c)
in the entry for “distribution”, in the second column, for “section
832(1) of ICTA” substitute “section 989 of ITA 2007”,
(d)
omit the entry for “interest”,
15
(e)
in the entry for “notice”, in the second column, for “section 832(1) of
ICTA” substitute “section 989 of ITA 2007”,
(f)
in the entry for “ordinary share capital”, in the second column, for
“section 832(1) of ICTA” substitute “section 989 of ITA 2007”,
(g)
in the entry for “personal representatives”, in the second column, for
20
“section 721(1)” substitute “section 989 of ITA 2007”,
(h)
in the entry for “recognised stock exchange”, in the second column,
for “section 841 of ICTA” substitute “section 1005 of ITA 2007”,
(i)
in the entry for “tax”, in the second column, at the end insert “(as
applied by section 989 of ITA 2007)”, and
25
(j)
omit the entry for “United Kingdom”.
449
In paragraph 37 of Schedule 4 (approved CSOP Schemes)—
(a)
in the entry for “child”, in the second column, for “section 832(5) of
ICTA (and see section 721(6) of this Act)” substitute “section 721(6)”,
(b)
in the entry for “close company”, in the second column, for “section
30
832(1) of ICTA” substitute “section 989 of ITA 2007”,
(c)
in the entry for “distribution”, in the second column, for “section
832(1) of ICTA” substitute “section 989 of ITA 2007”,
(d)
in the entry for “notice”, in the second column, for “section 832(1) of
ICTA” substitute “section 989 of ITA 2007”,
35
(e)
in the entry for “ordinary share capital”, in the second column, for
“section 832(1) of ICTA” substitute “section 989 of ITA 2007”,
(f)
in the entry for “personal representatives”, in the second column, for
“section 721(1)” substitute “section 989 of ITA 2007”,
(g)
in the entry for “recognised stock exchange”, in the second column,
40
for “section 841 of ICTA” substitute “section 1005 of ITA 2007”, and
(h)
omit the entry for “United Kingdom”.
450   (1)
Amend Schedule 5 (enterprise management incentives) as follows.
      (2)
In paragraph 11(10) (meaning of “qualifying subsidiary”)—
(a)
for “section 312(2A) of ICTA” substitute “section 252 of ITA 2007”,
45
and
(b)
for “Chapter 3 of Part 7 of ICTA” substitute “Part 5 of ITA 2007”.

Income Tax Bill
Schedule 1 — Minor and consequential amendments
Part 2 — Other enactments
613

      (3)
In paragraph 58, in the definition of “research and development”, for
“section 837A of ICTA” substitute “section 1006 of ITA 2007”.
      (4)
In paragraph 59—
(a)
in the entry for “child”, in the second column, for “section 832(5) of
ICTA (and see section 721(6) of this Act)” substitute “section 721(6)”,
5
(b)
in the entry for “close company”, in the second column, for “section
832(1) of ICTA” substitute “section 989 of ITA 2007”,
(c)
in the entry for “distribution”, in the second column, for “section
832(1) of ICTA” substitute “section 989 of ITA 2007”,
(d)
in the entry for “farming”, in the second column, for “section 832(1)
10
of ICTA” substitute “section 996 of ITA 2007”,
(e)
in the entry for “generally accepted accounting practice”, in the
second column, for “section 50(1) of the Finance Act 2004” substitute
“section 997 of ITA 2007”,
(f)
in the entry for “notice”, in the second column, for “section 832(1) of
15
ICTA” substitute “section 989 of ITA 2007”,
(g)
in the entry for “offshore installation”, in the second column, for
“section 837C of ICTA” substitute “sections 1001 and 1002 of ITA
2007”,
(h)
in the entry for “ordinary share capital”, in the second column, for
20
“section 832(1) of ICTA” substitute “section 989 of ITA 2007”,
(i)
in the entry for “personal representatives”, in the second column, for
“section 721(1)” substitute “section 989 of ITA 2007”,
(j)
in the entry for “51% subsidiary”, in the second column, for “section
838(1) of ICTA” substitute “section 989 of ITA 2007”,
25
(k)
in the entry for “tax”, in the second column, at the end insert “(as
applied by section 989 of ITA 2007)”,
(l)
in the entry for “tax year”, in the second column, for “section 721(1)”
substitute “section 4(2) of ITA 2007 (as applied by section 989 of that
Act)”,
30
(m)
in the entry for “trade”, in the second column, for “section 832(1) of
ICTA” substitute “section 989 of ITA 2007”, and
(n)
in the entry for “United Kingdom”, in the second column, for
“section 830 of ICTA” substitute “section 1013 of ITA 2007”.
Finance Act 2003 (c. 14)
35
451
The Finance Act 2003 is amended as follows.
452
Omit section 151 (non-resident companies: extent of charge to income tax).
453
In section 152 (non-resident companies: transactions carried out through
broker, investment manager or Lloyd’s agent) omit paragraph (b) and the
word “and” before it.
40
454
In section 153(2)(a) (general replacement of references to branch or agency
of company) for “paragraphs 3 and 4” substitute “paragraph 4”.
455
In paragraph 1(2) of Schedule 26 (non-resident companies: transactions
through broker, investment manager or Lloyd’s agent) omit paragraph (b)
and the word “and” before it.
45

Income Tax Bill
Schedule 1 — Minor and consequential amendments
Part 2 — Other enactments
614

Finance Act 2004 (c. 12)
456
The Finance Act 2004 is amended as follows.
457
In section 50 (generally accepted accounting practice) for “the Tax Acts”
wherever occurring substitute “the Corporation Tax Acts”.
458
In section 51 (use of different accounting practices within a group of
5
companies) for subsection (5) substitute—
“(5)
In this section “tax advantage” has the meaning given by section
840ZA of the Taxes Act 1988.”
459
In section 59 (construction industry scheme: contractors) after subsection (7)
insert—
10
“(8)
This section is subject to section 73A (designated international
organisations: exemption from section 59).”
460
In section 65 (change in control of company registered for gross payment)
for subsection (3) substitute—
“(3)
In this section references to a change in the control of a company are
15
references to such a change determined in accordance with section
995 of the Income Tax Act 2007.”
461
After section 73 (regulations under this Chapter: supplementary) insert—
“73A
Designated international organisations: exemption from section 59
(1)
The Treasury may by order designate for the purposes of this section
20
any international organisation of which the United Kingdom is a
member.
(2)
Section 59 does not apply to an organisation which is so designated.”
462   (1)
Amend section 83 (giving through the self-assessment return) as follows.
      (2)
Omit subsections (1) to (3).
25
      (3)
For subsections (4) and (5) substitute—
“(4)
A charitable company is treated as having made a claim for any
exemption to which it may be entitled under section 505(1)(c)(ii) of
the Taxes Act 1988 (charities: exemption from tax under Case III of
Schedule D) if—
30
(a)
it receives a gift as a result of a direction under section 429(2)
of the Income Tax Act 2007 (giving through self-assessment
return), and
(b)
as a result of section 429(4) of that Act, the gift is treated as a
qualifying donation for the purposes of Chapter 2 of Part 8 of
35
that Act (gift aid).
(5)
In this section “charitable company” means any body of persons
established for charitable purposes only.”
463
Omit sections 101 (payment of royalties without deduction at source) and
102 (claim for tax deducted at source from exempt interest or royalty
40
payments).
464
Omit sections 119 to 123 (individuals benefited by film relief).