|
| |
|
| |
(a) | in the definition of “charity” for the words from “each” to the end |
| |
| |
“(a) | the Trustees of the National Heritage |
| |
| 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 |
| |
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” |
| |
| 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, |
| |
| 40 |
(b) | the qualifying income consists of charitable income and non- |
| |
| |
(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 |
| |
|
| |
|
| |
|
which can used for that purpose is limited to the amount allocated to |
| |
| |
| |
(a) | Chapter 8 of Part 9 of ITA 2007 applies in relation to the |
| |
| 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 |
| |
| |
| |
“charitable income” means income within section 628(1) or |
| 15 |
| |
“non-charitable income” means income which is not charitable |
| |
| |
“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, |
| |
| |
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, |
| |
| |
(b) | is not paid through a trustee. |
| |
|
| |
|
| |
|
(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, |
| |
| |
(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 |
| |
| |
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 |
| |
| |
(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 |
| |
570 (1) | Amend section 686 (payments received after deduction of tax) as follows. |
| |
| |
(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 |
| |
| |
(b) | omit the words after “recipient”. |
| |
(3) | In subsection (2) for “section 687(2) of that Act” substitute “section 494(3) of |
| |
| 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”. |
| |
|
| |
|
| |
|
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 |
| |
| |
576 | In section 757 (interest and royalty payments: introduction) at the end |
| 5 |
| |
“(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 |
| |
| 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 |
| |
| |
(b) | for “subsection (9) of that section” substitute “section 917(2) of that |
| |
| 15 |
578 | In section 841 (unremittable income: introduction) for subsection (5) |
| |
| |
“(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 |
| |
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 |
| |
| |
(i) | after “members”, in the first place where it occurs, insert “or |
| |
| |
(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 |
| |
| |
| |
(i) | for “section 836B of ICTA” substitute “section 1016 of ITA |
| 35 |
| |
(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. |
| |
| |
(a) | omit the definition of “charity”, |
| |
|
| |
|
| |
|
(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 |
| |
| |
(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 |
| |
| |
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 |
| |
| |
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 |
| |
| |
(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- |
| |
| |
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 |
| |
| |
(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 |
| |
| 40 |
591 | In Part 1 of Schedule 4 (abbreviations) in the appropriate place insert— |
| |
|
592 (1) | Amend Part 2 of Schedule 4 (index of defined expressions) as follows. |
| |
|
| |
|
| |
|
(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 |
| |
| |
(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 |
| |
| |
(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 |
| |
(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 |
| |
| |
(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 |
| |
| |
(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 |
| |
| 40 |
(19) | In the entry for “farming”, in the second column, for “section 876” substitute |
| |
“section 996 of ITA 2007”. |
| |
|
| |
|
| |
|
(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 |
| |
| |
(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 |
| |
(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”. |
| |
|
| |
|