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
615

465
Omit sections 126 to 130 (individuals in partnership: exit charge).
466
In section 155(6)(a) and (b) (persons by whom scheme may be established:
supplementary) for “section 840A(1)(b) of ICTA” substitute “section
991(2)(b) of ITA 2007”.
467
In section 161 (meaning of “payment” etc) for subsection (8) substitute—
5
“(8)
For the purposes of this section whether a person is connected with
another person is determined in accordance with section 993 of ITA
2007.”
468   (1)
Amend section 162 (meaning of “loan”) as follows.
      (2)
In subsection (2)(a) for “section 841 of ICTA” substitute “section 1005 of ITA
10
2007”.
      (3)
For subsection (6) substitute—
“(6)
For the purposes of this section whether a person is connected with
another person is determined in accordance with section 993 of ITA
2007.”
15
469
In section 172A (surrender) for subsection (11) substitute—
“(11)
For the purposes of this section whether a person is connected with
another person is determined in accordance with section 993 of ITA
2007.”
470
In section 172B (increase in rights of connected person on death) for
20
subsection (9) substitute—
“(9)
For the purposes of this section whether a person is connected with
another person is determined in accordance with section 993 of ITA
2007.”
471
In section 172C (allocation of unallocated employer contributions) for
25
subsection (7) substitute—
“(7)
For the purposes of this section whether a person is connected with
another person is determined in accordance with section 993 of ITA
2007.”
472
In section 172D (limit on increase in benefits) for subsection (6) substitute—
30
“(6)
For the purposes of this section whether a person is connected with
another person is determined in accordance with section 993 of ITA
2007.”
473   (1)
Amend section 189 (relevant UK individual) as follows.
      (2)
In subsection (2)—
35
(a)
omit the “and” immediately after paragraph (b),
(b)
after paragraph (b) insert—
“(ba)
income which is chargeable under Part 3 of ITTOIA
2005 and is immediately derived from the carrying on
of a UK furnished holiday lettings business (whether
40
individually or as a partner acting personally in a
partnership), and”, and

Income Tax Bill
Schedule 1 — Minor and consequential amendments
Part 2 — Other enactments
616

(c)
for paragraph (c) substitute—
“(c)
income to which subsection (2A) applies.”
      (3)
After subsection (2) insert—
“(2A)
This subsection applies to income if—
(a)
it is patent income, and
5
(b)
the individual, alone or jointly, devised the invention for
which the patent in question was granted.”
      (4)
After subsection (4) insert—
“(5)
“UK furnished holiday lettings business” means a UK property
business so far as consisting of the commercial letting of furnished
10
holiday accommodation (within the meaning of Chapter 6 of Part 3
of ITTOIA 2005).
(6)
If there is a letting of accommodation only part of which is holiday
accommodation, just and reasonable apportionments are to be made
for the purpose of determining what is comprised in a UK furnished
15
holiday lettings business.
(7)
“Patent income” means—
(a)
royalties or other sums paid in respect of the use of a patent
charged to tax under section 579 of ITTOIA 2005,
(b)
amounts on which tax is payable under section 587 or 593 of
20
ITTOIA 2005, or
(c)
amounts on which tax is payable under—
(i)
section 472(5) of the Capital Allowances Act, or
(ii)
paragraph 100 of Schedule 3 to that Act.”
474
In section 192 (relief at source) omit subsection (5).
25
475
In section 193(6) (relief under net pay arrangements)—
(a)
for “from the total income” substitute “in calculating the net income”,
and
(b)
at the end insert “(see Step 2 of the calculation in section 23 of ITA
2007)”.
30
476
In section 194(1) (relief on making of claim)—
(a)
for “from the total income” substitute “in calculating the net income”,
and
(b)
at the end insert “(see Step 2 of the calculation in section 23 of ITA
2007)”.
35
477
In section 266A (member’s liability) for subsection (7) substitute—
“(7)
For the purposes of this section whether a person is connected with
another person is determined in accordance with section 993 of ITA
2007.”
478
In section 273 (members liable as scheme administrator) for subsection (11)
40
substitute—
“(11)
For the purposes of this section whether a person is connected with
another person is determined in accordance with section 993 of ITA
2007.”

Income Tax Bill
Schedule 1 — Minor and consequential amendments
Part 2 — Other enactments
617

479
In section 278 (market value) for subsection (4) substitute—
“(4)
For the purposes of this section whether a person is connected with
another person is determined in accordance with section 993 of ITA
2007.”
480   (1)
Amend section 279 (other definitions) as follows.
5
      (2)
In subsection (1)—
(a)
omit the definition of “charity”,
(b)
after the definitions of “pension credit” and “pension debit” insert
“and”, and
(c)
omit the words after the definition of “pension sharing order or
10
provision”.
      (3)
After that subsection insert—
“(1A)
In this Part, so far as it forms part of the Corporation Tax Acts,
expressions which are defined for the purposes of the Income Tax
Acts are to be given the same meaning as they have in the Income
15
Tax Acts.”
481   (1)
Amend section 280 (abbreviations and general index) as follows.
      (2)
In subsection (1) omit the “and” immediately before the definition of
“ITTOIA 2005” and after that definition insert “, and
“ITA 2007” means the Income Tax Act 2007.”
20
      (3)
In subsection (2)—
(a)
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)”,
(b)
in the entry for “basic rate limit”, in the second column, for “section
25
832(1) of ICTA” substitute “section 20(2) of ITA 2007 (as applied by
section 989 of that Act)”,
(c)
in the entry for “chargeable gain”, in the second column, for “section
832(1) of ICTA” substitute “section 989 of ITA 2007”,
(d)
in the entry for “charity”, in the second column, for “section 279(1)”
30
substitute “section 989 of ITA 2007”,
(e)
in the entry for “company”, in the second column, for “section 832(1)
of ICTA” substitute “section 992 of ITA 2007”,
(f)
in the entry for “higher rate”, in the second column, for “section
832(1) of ICTA” substitute “section 6(2) of ITA 2007 (as applied by
35
section 989 of that Act)”,
(g)
after the entry for “money purchase benefits” insert—

“net income
section 23 of ITA 2007

(as applied by section

989 of that Act)”,

40
(h)
in the entry for “period of account”, in the second column, for
“section 832(1) of ICTA” substitute “section 989 of ITA 2007”,
(i)
in the entry for “personal representatives”, in the second column, for
“section 279(1)” substitute “section 989 of ITA 2007”,

Income Tax Bill
Schedule 1 — Minor and consequential amendments
Part 2 — Other enactments
618

(j)
in the entry for “property investment LLP”, in the second column, for
“section 842B of ICTA” substitute “section 1004 of ITA 2007”,
(k)
in the entry for “retail prices index”, in the second column, for
“section 279(1)” substitute “section 989 of ITA 2007”,
(l)
in the entry for “tax year”, in the second column, for “section 279(1)”
5
substitute “section 4(2) of ITA 2007 (as applied by section 989 of that
Act)”,
(m)
in the entry for “the tax year 2006-07 etc”, in the second column, for
“section 279(1)” substitute “section 4(4) of ITA 2007 (as applied by
section 989 of that Act)”, and
10
(n)
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)”.
482   (1)
Amend Schedule 15 (charge to income tax on benefits received by former
owner of property) as follows.
      (2)
For paragraph 2 substitute—
15
“2    (1)
For the purposes of this Schedule whether a person is connected
with another person is determined in accordance with section 993
of the Income Tax Act 2007.
      (2)
But for those purposes sections 993 and 994 of that Act are to be
read as if in those sections—
20
(a)
“relative” included uncle, aunt, nephew and niece, and
(b)
“settlement”, “settlor” and “trustee” had the same
meanings as in IHTA 1984.”
      (3)
In paragraph 9(1) for paragraph (c) substitute—
“(c)
sections 720 to 730 of the Income Tax Act 2007,”.
25
483
In paragraph 4 of Schedule 27 (meaning of “offshore installation”) for
“sections 573 and 574” substitute “section 573”.
484
In paragraph 4 of Schedule 29A (investment-regulated pension schemes) for
sub-paragraph (2) substitute—
    “(2)
For the purposes of sub-paragraph (1) whether a person is
30
connected with another person is determined in accordance with
section 993 of ITA 2007.”
485
In paragraph 11D of Schedule 36 (transitional provisions) for sub-paragraph
(5) substitute—
    “(5)
For the purposes of this paragraph whether a person is connected
35
with another person is determined in accordance with section 993
of ITA 2007.”
Pensions Act 2004 (c. 35)
486
The Pensions Act 2004 is amended as follows.
487
In Schedule 3 (restricted information held by the Regulator: certain
40
permitted disclosures to facilitate exercise of functions), in the entry relating
to the Commissioners of Inland Revenue or their officers—
(a)
omit the “or” immediately after paragraph (f), and

Income Tax Bill
Schedule 1 — Minor and consequential amendments
Part 2 — Other enactments
619

(b)
in the second column after paragraph (g) insert “or—
(h)
the Income Tax Act 2007 (so far as relating to
functions previously exercised under the Income and
Corporation Taxes Act 1988).”
488
In Schedule 8 (restricted information held by the Board: certain permitted
5
disclosures to facilitate exercise of functions), in the entry relating to the
Commissioners of Inland Revenue or their officers—
(a)
omit the “or” immediately after paragraph (e), and
(b)
in the second column after paragraph (f) insert “or—
(g)
the Income Tax Act 2007 (so far as relating to
10
functions previously exercised under the Income and
Corporation Taxes Act 1988).”
Constitutional Reform Act 2005 (c. 4)
489
The Constitutional Reform Act 2005 is amended as follows.
490
In paragraph 4 of Schedule 7 (protected functions of the Lord Chancellor) at
15
the end of Part A (general) insert—

“Income Tax Act 2007

Section 704(1)”.
491
In the table in Part 3 of Schedule 14 (appointments by the Lord Chancellor:
offices to which paragraph 2(2)(d) of Schedule 12 to the Act applies) at the
20
end add—

“Chairman of section 704
Section 704(1) of the Income

tribunal
Tax Act 2007”

Member of section 704

tribunal

25
Income Tax (Trading and Other Income) Act 2005 (c. 5)
492
The Income Tax (Trading and Other Income) Act 2005 is amended as
follows.
493
In section 1 (overview of Act) omit subsection (2).
494
In section 12(3) (profits of mines etc) for “Chapter 1 of Part 10 of ICTA”
30
substitute “Part 4 of ITA 2007”.
495   (1)
Amend section 13 (visiting performers) as follows.
      (2)
In subsection (8) omit the definitions of “payment” and “transfer”.
      (3)
After that subsection insert—
“(9)
In this section and section 14—
35
(a)
references to a payment include references to a payment by
way of loan of money, and
(b)
references to a transfer do not include references to a transfer
of money but, subject to that, include references to—

Income Tax Bill
Schedule 1 — Minor and consequential amendments
Part 2 — Other enactments
620

(i)
a temporary transfer (as by way of loan), and
(ii)
a transfer of a right (whether or not a right to receive
money).
(10)
This section does not apply to payments or transfers of a kind
prescribed in regulations under section 966(6) of ITA 2007.”
5
496
In section 17(3) (effect of becoming or ceasing to be a UK resident) for “set
off under section 385 of ICTA against” substitute “deducted under section 83
of ITA 2007 from”.
497
Omit section 51 (patent royalties).
498   (1)
Amend section 52 (exclusion of double relief for interest) as follows.
10
      (2)
In subsections (1), (5) and (6) for “section 353 of ICTA” substitute “section
383 of ITA 2007”.
      (3)
In subsection (6) for “section 368(3) of ICTA” substitute “section 387(2) and
(3) of that Act”.
499
In section 87(5) (expenses of research and development) for “section 837A of
15
ICTA” substitute “section 1006 of ITA 2007”.
500
In section 108(4) (gifts of trading stock etc to charities) omit paragraphs (c)
and (d).
501
In section 179(a) (connected persons) for “section 839 of ICTA” substitute
“section 993 of ITA 2007”.
20
502   (1)
Amend section 232 (treatment of trading adjustment income) as follows.
      (2)
In subsection (3) for “Chapter 1 of Part 10 of ICTA” substitute “Part 4 of ITA
2007”.
      (3)
In subsection (4) for the words from “the trade” to the end substitute “the
trade is relevant UK earnings within section 189(2)(b) of FA 2004,
25
adjustment income is similarly relevant UK earnings.”
503
In section 248(3) (debts paid after cessation)—
(a)
for “section 109A(4) or (4A) of ICTA” substitute “section 96 of ITA
2007”, and
(b)
after “expenditure)” insert “as a result of subsection (1)(b) of that
30
section”.
504   (1)
Amend section 250 (receipts relating to post-cessation expenditure) as
follows.
      (2)
In subsection (1) for “section 109A of ICTA” substitute “section 96 of ITA
2007”.
35
      (3)
In subsection (2)—
(a)
in paragraph (a) for “section 109A(2)(a) or (b) of ICTA” substitute
“section 97(2) or (3) of ITA 2007”,
(b)
in paragraph (b) for “section 109A(2)(c) of ICTA” substitute “section
97(4) of ITA 2007”, and
40
(c)
in paragraph (c) for “section 109A(2)(d) of ICTA” substitute “section
97(5) of ITA 2007”.

Income Tax Bill
Schedule 1 — Minor and consequential amendments
Part 2 — Other enactments
621

505
In section 254(3)(b) (allowable deductions) for “section 90(4) of FA 1995”
substitute “section 261D of TCGA 1992”.
506   (1)
Amend section 256 (treatment of post-cessation receipts) as follows.
      (2)
In subsection (1)(b) omit “earned income within section 833(4)(c) of ICTA
or”.
5
      (3)
In subsection (2) omit “earned income or”.
507
In section 272(2) (profits of a property business: application of trading
income rules), omit the entry in the table relating to section 51.
508
In section 322(2) (commercial letting of furnished holiday
accommodation)—
10
(a)
omit paragraphs (b) and (c), and
(b)
for paragraph (f) and the “and” immediately before that paragraph
substitute—
“(f)
section 189(2)(ba) of FA 2004 (meaning of “relevant
UK earnings” for pension purposes),
15
(g)
Part 4 of ITA 2007 ( loss relief: see section 127 of that
Act), and
(h)
section 836(3) of ITA 2007 (jointly held property: see
exception D).”
509
In section 327(2)(b) (capital allowances and loss relief) for “Chapter 1 of Part
20
10 of ICTA” substitute “Part 4 of ITA 2007”.
510   (1)
Amend section 328 (earned income and relevant UK earnings for pension
purposes) as follows.
      (2)
In subsection (2) for “treated as” to the end substitute “relevant UK earnings
within section 189(2)(ba) of FA 2004.”
25
      (3)
In the sidenote omit “Earned income and”.
511
In section 333(3) (treatment of property business adjustment income) for
“Chapter 1 of Part 10 of ICTA” substitute “Part 4 of ITA 2007”.
512
In section 354(2) (other rules about what counts as a “post-cessation
receipt”)—
30
(a)
after “section 248 (debts paid after cessation)” insert “(reading the
reference in subsection (3) to section 96 of ITA 2007 as a reference to
section 125 of that Act)”, and
(b)
after “section 250 (receipts relating to post-cessation expenditure)”
insert “(reading the reference in subsection (1) to section 96 of ITA
35
2007 as a reference to section 125 of that Act)”.
513
In section 369(4) (charge to tax on interest) for the words from “sections
714(5)” to the end substitute “Chapter 3 of Part 12 of ITA 2007 (exemption for
interest on securities to which Chapter 2 of that Part applies)”.
514
In section 372(2) (building society dividends) for the words from “has” to the
40
end substitute “includes any distribution (whether or not described as a
dividend)”.
515   (1)
Amend section 397 (tax credits for qualifying distributions: UK residents
and eligible non-UK residents) as follows.