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Income Tax Bill


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

629

 

      (4)  

In subsection (6)—

(a)   

in the definition of “charity” for the words from “each” to the end

substitute—

“(a)   

the Trustees of the National Heritage

Memorial Fund,

5

(b)   

the Historic Buildings and Monuments

Commission for England, and

(c)   

the National Endowment for Science,

Technology and the Arts, and”, and

(b)   

omit the definition of “resident” and the “and” immediately after it.

10

556        

In section 631(7) (retained and accumulated income) for “the total income”

substitute “the child’s total income or net income at Step 2 or 3 of the

calculation in section 23 of ITA 2007”.

557        

In section 635(3)(d) (settlements: amounts treated as income of settlor:

amount of available income) for “rate applicable to trusts” substitute “trust

15

rate”.

558   (1)  

Amend section 636 (calculation of undistributed income) as follows.

      (2)  

In subsection (6) for “section 505 of ICTA (charities: general)” substitute “any

provision to which subsection (7) applies”.

      (3)  

After that subsection insert—

20

“(7)   

This subsection applies to the following provisions of ITA 2007—

section 521(4) (gifts entitling donor to gift-aid relief),

section 522(5) (gifts of money from companies),

section 523(5) (payments from other charities),

section 524 (profits etc of charitable trades),

25

section 529 (profits from fund-raising events),

section 530 (profits from lotteries),

section 531 (property income etc),

section 532 (savings and investment income),

section 533 (public revenue dividends),

30

section 536 (miscellaneous income), and

section 537 (income from estates in administration).”

559        

In section 640(1) and (3)(a) (settlements: amounts treated as income of

settlor: grossing-up of deemed income) for “rate applicable to trusts”

substitute “trust rate”.

35

560        

After section 646 insert—

“646A   

Trustees’ expenses to be rateably apportioned

(1)   

This section applies if—

(a)   

in a tax year qualifying income arises under a UK settlement,

and

40

(b)   

the qualifying income consists of charitable income and non-

charitable income.

(2)   

If expenses of the trustees are to be set against the charitable income

by virtue of section 484 of ITA 2007, the amount of those expenses

 

 

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

630

 

which can used for that purpose is limited to the amount allocated to

the charitable income.

(3)   

If—

(a)   

Chapter 8 of Part 9 of ITA 2007 applies in relation to the

charitable income, and

5

(b)   

expenses of the trustees are to be used to reduce the

charitable income for income tax purposes,

   

the amount of those expenses which can used for that purpose is

limited to the amount allocated to the charitable income.

(4)   

For the purposes of subsections (2) and (3) the amount of the

10

expenses allocated to the charitable income is determined by

apportioning them rateably between the charitable income and the

non-charitable income.

(5)   

In this section—

“charitable income” means income within section 628(1) or

15

630(1),

“non-charitable income” means income which is not charitable

income, and

“qualifying income” and “UK settlement” have the same

meaning as in section 628.”

20

561        

In section 669(3)(a) (reduction in residuary income: inheritance tax on

accrued income) for sub-paragraph (i) substitute—

“(i)   

in the case of savings income, at the savings rate,

and”.

562        

In section 677 (relief where UK income tax borne by foreign estate: absolute

25

interests) after subsection (2) insert—

“(3)   

The tax reduction under this section is given effect at Step 6 of the

calculation in section 23 of ITA 2007.”

563        

In section 678 (relief where UK income tax borne by foreign estate: limited

and discretionary interests) after subsection (2) insert—

30

“(3)   

The tax reduction under this section is given effect at Step 6 of the

calculation in section 23 of ITA 2007.”

564        

In section 679(3)(b) (income from which basic amounts are treated as paid)

for “lower rate” substitute “savings rate”.

565        

In section 680(4) (income treated as bearing income tax) for “lower rate”

35

substitute “savings rate”.

566        

After section 680 insert—

“680A   

Income treated as savings income or dividend income

(1)   

Subsections (2) and (3) apply to income if it—

(a)   

is treated under section 656(3) or 657(4) (gross amount of

40

estate income treated as bearing tax at the applicable rate) as

bearing tax at the savings rate or the dividend ordinary rate,

and

(b)   

is not paid through a trustee.

 

 

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

631

 

(2)   

So far as the income is treated as bearing tax at the savings rate, it is

treated as savings income.

(3)   

So far as the income is treated as bearing tax at the dividend ordinary

rate, it is treated as dividend income.

(4)   

Subsections (5) and (6) apply to income if it—

5

(a)   

is treated by section 662, read with section 656(3) or 657(4), as

bearing tax at the savings rate or the dividend ordinary rate,

and

(b)   

is paid through a trustee.

(5)   

So far as the income is treated as bearing tax at the savings rate, it is

10

treated as savings income of the trustee.

(6)   

So far as the income is treated as bearing tax at the dividend ordinary

rate, it is treated as dividend income of the trustee.”

567        

In section 682 (assessments, adjustments and claims after the administration

period) after subsection (4) insert—

15

“(4A)   

The excess charged under subsection (4)(b) is treated as an amount

of income for income tax purposes, except so far as it represents a tax

reduction given effect at Step 6 of the calculation in section 23 of ITA

2007.”

568        

In section 684(3) (Chapter 7 of Part 5 subject to section 687 of ICTA) for

20

“section 687 of ICTA” substitute “section 494 of ITA 2007”.

569   (1)  

Amend section 685A (discretionary payments under settlor-interested

settlements) as follows.

      (2)  

In subsection (4) omit paragraph (c) and the “and” immediately before it.

      (3)  

In subsection (6) for “Section 687 of ICTA” substitute “Sections 494 and 495

25

of ITA 2007”.

570   (1)  

Amend section 686 (payments received after deduction of tax) as follows.

      (2)  

In subsection (1)—

(a)   

for “Income tax deducted under either of the following sections”

substitute “In accordance with section 848 of ITA 2007, a sum

30

representing income tax deducted under Chapter 6 of Part 15 of that

Act”, and

(b)   

omit the words after “recipient”.

      (3)  

In subsection (2) for “section 687(2) of that Act” substitute “section 494(3) of

ITA 2007”.

35

571        

In section 704(4)(a) (types of arrangements and providers) for “section

840A(1)(b) of ICTA” substitute “section 991(2)(b) of ITA 2007”.

572        

In section 714(6) (exemption of profits from FOTRA securities) for “Chapter

3 of Part 17 of ICTA” substitute “Chapter 2 of Part 13 of ITA 2007”.

573        

In section 724 (regulations) omit subsection (3).

40

574        

In section 755(3) (exemption of interest on foreign currency securities etc

owned by non-UK residents) for “Chapter 3 of Part 17 of ICTA” substitute

“Chapter 2 of Part 13 of ITA 2007”.

 

 

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

632

 

575        

In section 756A(5) (interest on certain deposits of victims of National-

Socialist persecution) for “meaning given by section 481(3) of ICTA”

substitute “same meaning as in Chapter 19 of Part 15 of ITA 2007 (see section

983 of that Act)”.

576        

In section 757 (interest and royalty payments: introduction) at the end

5

insert—

“(4)   

See section 914 of ITA 2007 for provision enabling a company to

make a royalty payment gross if it reasonably believes that the

payment is exempt from income tax as a result of section 758 of this

Act.”

10

577        

In section 767(2) (power to amend references to the Directive by order)—

(a)   

for “section 101 of FA 2004” substitute “sections 914 to 916 of ITA

2007”, and

(b)   

for “subsection (9) of that section” substitute “section 917(2) of that

Act”.

15

578        

In section 841 (unremittable income: introduction) for subsection (5)

substitute—

“(5)   

This Chapter does not apply to accrued income profits which a

person is treated as making under Chapter 2 of Part 12 of ITA 2007,

but see sections 668 and 669 of that Act (which make similar

20

provision).”

579        

In section 852(7) (carrying on by partner of notional trade) for “carried

forward under section 385 of ICTA and set against” substitute “deducted

under section 83 of ITA 2007 from”.

580        

In section 863(2) (limited liability partnerships)—

25

(a)   

in paragraph (a) after “firm” insert “or partnership”, and

(b)   

in paragraph (b)—

(i)   

after “members”, in the first place where it occurs, insert “or

partners”, and

(ii)   

after “firm” insert “or partnership”.

30

581        

In section 871 (apportionment etc of miscellaneous profits to tax year)—

(a)   

in subsection (1)(a) for “section 836B of ICTA” substitute “section

1016 of ITA 2007”, and

(b)   

in subsection (2)—

(i)   

for “section 836B of ICTA” substitute “section 1016 of ITA

35

2007”, and

(ii)   

for “subsection (4)(a)” substitute “subsection (3)(a)”.

582        

In section 872(3)(a) (losses calculated on same basis as miscellaneous

income) for “section 836B of ICTA” substitute “section 1016 of ITA 2007”.

583        

Omit section 876 (meaning of “farming” and related expressions).

40

584        

Omit section 877 (meaning of “grossing up”).

585   (1)  

Amend section 878 (other definitions) as follows.

      (2)  

In subsection (1)—

(a)   

omit the definition of “charity”,

 

 

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

633

 

(b)   

after the definition of “houseboat” insert “and”, and

(c)   

omit the words after the definition of “income”.

      (3)  

In subsection (5) for “Section 839 of ICTA” substitute “Section 993 of ITA

2007”.

      (4)  

In subsection (6) for “Section 840 of ICTA (meaning of control in relation to

5

a body corporate)” substitute “Section 995 of ITA 2007 (meaning of

“control”)”.

586        

In section 879 (interpretation: Scotland)—

(a)   

in subsection (1) omit the definitions of “assignment” and

“surrender” and the “and” immediately before the definition of

10

“surrender”, and

(b)   

omit subsection (2).

587        

In section 885(3)(c) (general index in Schedule 4) for “ICTA or ITEPA 2003”

substitute “another Act”.

588        

In Schedule 2 (transitionals and savings etc) omit paragraph 50(3).

15

589   (1)  

Amend paragraph 82 of Schedule 2 (transitionals and savings etc) as follows.

      (2)  

In paragraph (a) for “section 505(1) of ICTA (exemption from income tax for

certain income forming part of the income of a charity)” substitute “any of

sections 521(4), 522(5), 523(5), 524, 529 to 533, 536 and 537 of ITA 2007

(certain exemptions: special rules about charitable trusts)”.

20

      (3)  

In paragraph (b) for the words from “505(3)” to the end substitute “541 of

that Act (restrictions on exemptions: attributing items of income to the non-

exempt amount)”.

590        

In paragraph 109(4) of Schedule 2 (transitional provision: contracts in

accounting periods beginning before 1st January 1992) for the words from

25

“Section 539(3)” to the end substitute “Section 539 (relief for deficiencies) has

effect as if for subsections (1) to (6) there were substituted—

“(1)   

A deficiency from a policy or contract arising on a chargeable event

is allowable as a deduction in calculating an individual’s net income

for a tax year if, had a gain arisen instead on the chargeable event—

30

(a)   

the individual would have been liable to income tax on the

gain for that year, or

(b)   

the individual would have been so liable apart from the

requirement in section 465(1) that the individual must be UK

resident in the tax year in which the gain arises.

35

(2)   

See section 540 for the cases in which a deficiency is treated as arising

from a policy or contract on a chargeable event, section 541 for how

the deficiency is calculated and section 469(5) for the apportionment

of deficiencies in cases where two or more persons are interested in

a policy or contract.””

40

591        

In Part 1 of Schedule 4 (abbreviations) in the appropriate place insert—

 

“ITA 2007

The Income Tax Act 2007”

 

592   (1)  

Amend Part 2 of Schedule 4 (index of defined expressions) as follows.

 

 

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

634

 

      (2)  

In the entry for “assignment (in the application of the Act to Scotland)”, in

the second column, for “section 879(1)” substitute “section 1008(1) of ITA

2007”.

      (3)  

In the entry for “authorised unit trust”, in the second column, for “section

832(1) of ICTA” substitute “section 989 of ITA 2007”.

5

      (4)  

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)”.

      (5)  

In the entry for “body of persons”, in the second column, for “section 832(1)

of ICTA” substitute “section 989 of ITA 2007”.

10

      (6)  

In the entry for “building society”, in the second column, for “section 832(1)

of ICTA” substitute “section 989 of ITA 2007”.

      (7)  

In the entry for “capital allowance”, in the second column, for “section 832(1)

of ICTA” substitute “section 989 of ITA 2007”.

      (8)  

Omit the entry for “chargeable period”.

15

      (9)  

In the entry for “charity”, in the second column, for “section 878(1)”

substitute “section 989 of ITA 2007”.

     (10)  

Omit the entry for “child”.

     (11)  

In the entry for “company”, in the second column, for “section 832(1) of

ICTA” substitute “section 992 of ITA 2007”.

20

     (12)  

In the entry for “connected”, in the second column, for “section 839 of ICTA”

substitute “section 993 of ITA 2007”.

     (13)  

In the entry for “control”—

(a)   

in the first column, omit “(in relation to a body corporate)”, and

(b)   

in the second column, for “section 840 of ICTA” substitute “section

25

995 of ITA 2007”.

     (14)  

In the entry for “distribution”, in the second column, for “section 832(1) of

ICTA” substitute “section 989 of ITA 2007”.

     (15)  

In the entry for “the dividend ordinary rate”, in the second column, for

“section 832(1) of ICTA” substitute “section 8(1) of ITA 2007 (as applied by

30

section 989 of that Act)”.

     (16)  

In the entry for “the dividend trust rate”, in the second column, for “section

832(1) of ICTA” substitute “section 9(2) of ITA 2007 (as applied by section

989 of that Act)”.

     (17)  

In the entry for “the dividend upper rate”, in the second column, for “section

35

832(1) of ICTA” substitute “section 8(2) of ITA 2007 (as applied by section

989 of that Act)”.

     (18)  

In the entry for “estate in land (in relation to any land in Scotland)”, in the

second column, for “section 832(1) of ICTA” substitute “section 1008(1) of

ITA 2007”.

40

     (19)  

In the entry for “farming”, in the second column, for “section 876” substitute

“section 996 of ITA 2007”.

 

 

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

635

 

     (20)  

In the entry for “for accounting purposes”, in the second column, for “section

832(1) of ICTA” substitute “section 997 of ITA 2007”.

     (21)  

In the entry for “forestry”, in the second column, for “section 876(3)”

substitute “section 996(3) of ITA 2007”.

     (22)  

In the entry for “generally accepted accounting practice”, in the second

5

column, for “section 832(1) of ICTA and section 50 of FA 2004” substitute

“section 997 of ITA 2007”.

     (23)  

In the entry for “grossing up”, in the second column, for “section 877”

substitute “section 998 of ITA 2007”.

     (24)  

In the entry for “higher rate”, in the second column, for “section 832(1) of

10

ICTA” substitute “section 6(2) of ITA 2007 (as applied by section 989 of that

Act)”.

     (25)  

Omit the entry for “interest”.

     (26)  

In the entry for “international accounting standards”, in the second column,

for “section 832(1) of ICTA and section 50(2) of FA 2004” substitute “section

15

997 of ITA 2007”.

     (27)  

Omit the entry for “investment trust”.

     (28)  

In the entry for “local authority”, in the second column, for “section 842A of

ICTA” substitute “section 999 of ITA 2007”.

     (29)  

Omit the entry for “lower rate”.

20

     (30)  

In the entry for “market gardening”, in the second column, for “section

876(5)” substitute “section 996(5) of ITA 2007”.

     (31)  

In the entry for “non-UK resident”, in the second column, for “section 878(1)”

substitute “section 989 of ITA 2007”.

     (32)  

In the entry for “normal self-assessment filing date”, in the second column,

25

for “section 878(1)” substitute “section 989 of ITA 2007”.

     (33)  

In the entry for “notice”, in the second column, for “section 832(1) of ICTA”

substitute “section 989 of ITA 2007”.

     (34)  

In the entry for “oil and gas exploration and appraisal”, in the second

column, for “section 837B of ICTA” substitute “section 1003 of ITA 2007”.

30

     (35)  

In the entry for “ordinary share capital”, in the second column, for “section

832(1) of ICTA” substitute “section 989 of ITA 2007”.

     (36)  

In the entry for “period of account”, in the second column, for “section 832(1)

of ICTA” substitute “section 989 of ITA 2007”.

     (37)  

In the entry for “permanent establishment”, in the second column, for

35

“section 832(1) of ICTA and section 148 of FA 2003” substitute “section 148

of FA 2003 (as applied by section 989 of ITA 2007)”.

     (38)  

In the entry for “personal representatives”, in the second column, for

“section 878(1)” substitute “section 989 of ITA 2007”.

     (39)  

In the entry for “profits or gains”, in the second column, for “section 833(1)

40

of ICTA” substitute “section 989 of ITA 2007”.

 

 

 
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