Finance Bill

House of Commons

Session 2008 - 09
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Other Bills before Parliament

Finance Bill

Finance Bill
Part 8 — Miscellaneous
65

(c)
make incidental, consequential or transitional provision (including
provision modifying enactments and instruments, whenever passed or
made).
(5)
Regulations under this section may include provision having effect in relation
to any time before they are made if the provision does not increase any
5
person’s liability to tax.
(6)
Regulations under this section are to be made by statutory instrument.
(7)
A statutory instrument containing regulations under this section is subject to
annulment in pursuance of a resolution of the House of Commons.
(8)
In this section—
10
“arrangements” includes any arrangements, scheme or understanding of
any kind, whether or not legally enforceable and whether involving a
single transaction or two or more transactions;
“company” means a company formed and registered under the
Companies Act 2006 (or treated as formed and registered under that
15
Act);
“derivative contract” has the same meaning as in Part 7 of CTA 2009 (see
section 576 of that Act);
“goodwill” and “intangible fixed asset” have the same meaning as in Part
8 of CTA 2009 (see sections 713 and 715 of that Act);
20
“loan relationship” has the same meaning as in the Corporation Tax Acts
(see section 302(1) and (2) of CTA 2009);
“modify” includes amend, repeal or revoke;
“tax” includes stamp duty;
“tax advantage” means—
25
(a)
a relief from tax (including a tax credit) or increased relief from
tax,
(b)
a repayment of tax or increased repayment of tax,
(c)
the avoidance, reduction or delay of a charge to tax or an
assessment to tax, or
30
(d)
the avoidance of a possible assessment to tax.
124
National Savings ordinary accounts: surplus funds
(1)
As soon as practicable after the passing of this Act—
(a)
the Director of Savings and the Commissioners must prepare a
statement showing the relevant surplus, and
35
(b)
the Commissioners must pay the relevant surplus into the
Consolidated Fund.
(2)
The relevant surplus is the amount held by the Commissioners by virtue of
section 17 of the 1971 Act (including any such amount held in investments),
less the aggregate of—
40
(a)
such sums as the Treasury may determine to be equal to those
expended by the Director of Savings in connection with ordinary
accounts,
(b)
such sums as are necessary to defray the expenses incurred by the
Commissioners in connection with ordinary accounts, and
45
(c)
such sums as are required to be paid into the Consolidated Fund by
virtue of section 20 of the 1971 Act.

Finance Bill
Part 9 — Final provisions
66

(3)
The Commissioners—
(a)
must pay into the Consolidated Fund the sums determined in
accordance with subsection (2)(a), and
(b)
may retain the sums determined in accordance with subsection (2)(b).
(4)
As soon as practicable after preparing a statement under subsection (1), the
5
Director of Savings and the Commissioners must transmit the statement to the
Comptroller and Auditor General who must—
(a)
examine, certify and make a report on it, and
(b)
lay copies of the statement, together with copies of that report, before
Parliament.
10
(5)
The Treasury may by order repeal or otherwise amend any enactment if the
repeal or amendment appears to the Treasury to be necessary or expedient in
consequence of—
(a)
the closure of ordinary accounts and the transfer of their balances to
other accounts (see, in particular, regulations 2B to 2BB of the National
15
Savings Bank Regulations 1972 (S.I. 1972/764)), or
(b)
this section.
(6)
An order under subsection (5) is to be made by statutory instrument.
(7)
No order may be made under subsection (5) unless a draft of the statutory
instrument containing it has been laid before, and approved by a resolution of,
20
the House of Commons.
(8)
In this section—
(a)
a reference to sums expended or expenses incurred in connection with
ordinary accounts includes a reference to sums expended or expenses
incurred in connection with the holding of amounts by virtue of section
25
17 of the 1971 Act (including their holding in investments), and
(b)
expressions used in this section and in the 1971 Act have the same
meaning in this section as in that Act.
(9)
In this section—
“the 1971 Act” means the National Savings Bank Act 1971;
30
“enactment” includes—
(a)
an enactment contained in the 1971 Act, and
(b)
subordinate legislation (which has the same meaning as in the
Interpretation Act 1978).
Part 9
35
Final provisions
125
Interpretation
(1)
In this Act—
“ALDA 1979” means the Alcoholic Liquor Duties Act 1979,
“BGDA 1981” means the Betting and Gaming Duties Act 1981,
40
“CAA 2001” means the Capital Allowances Act 2001,
“CRCA 2005” means the Commissioners for Revenue and Customs Act
2005,
“CTA 2009” means the Corporation Tax Act 2009,

Finance Bill
Part 9 — Final provisions
67

“FISMA 2000” means the Financial Services and Markets Act 2000,
“HODA 1979” means the Hydrocarbon Oil Duties Act 1979,
“ICTA” means the Income and Corporation Taxes Act 1988,
“IHTA 1984” means the Inheritance Tax Act 1984,
“ITA 2007” means the Income Tax Act 2007,
5
“ITEPA 2003” means the Income Tax (Earnings and Pensions) Act 2003,
“ITTOIA 2005” means the Income Tax (Trading and Other Income) Act
2005,
“OTA 1975” means the Oil Taxation Act 1975,
“OTA 1983” means the Oil Taxation Act 1983,
10
“PRTA 1980” means the Petroleum Revenue Tax Act 1980,
“TCGA 1992” means the Taxation of Chargeable Gains Act 1992,
“TMA 1970” means the Taxes Management Act 1970,
“TPDA 1979” means the Tobacco Products Duty Act 1979,
“VATA 1994” means the Value Added Tax Act 1994, and
15
“VERA 1994” means the Vehicle Excise and Registration Act 1994.
(2)
In this Act—
“FA”, followed by a year, means the Finance Act of that year, and
“F(No.2)A”, followed by a year, means the Finance (No.2) Act of that year.
(3)
In the tables in Part 1 of Schedule 1 to CAA 2001, Part 1 of Schedule 1 to ITEPA
20
2003 and Part 1 of Schedule 4 to ITTOIA 2005, at the beginning insert—

“FA followed by a year
The Finance Act of that

year

F(No.2)A followed by a
The Finance (No.2) Act of

year
that year”.

25
(4)
Omit all of the entries in those tables relating to a Finance Act or a Finance
(No.2) Act.
(5)
In the following provisions, for “the Finance Act” substitute “FA”—
(a)
in CAA 2001, sections 70G(5), 70H(3) (in both places), 70O(4)(b),
105(2A), 186(3) and (5) (as amended by paragraph 5 of Schedule 27 to
30
FA 2008), 257(2)(a), 360B(2)(a) and 360C(2)(b) and paragraph 105(2) of
Schedule 3, and
(b)
in ITEPA 2003, sections 420(1)(h) and 702(5B), paragraph 78(2)(b) of
Schedule 2 and paragraph 54 of Schedule 7.
(6)
Accordingly, omit—
35
(a)
in FA 2004, in Schedule 35, paragraphs 49 and 65(2),
(b)
in F(No.2)A 2005, section 10(7),
(c)
in FA 2006, section 84(4), and
(d)
in FA 2008, in Schedule 25, paragraph 6.
126
Short title
40
This Act may be cited as the Finance Act 2009.

68
Finance Bill
Schedule 1 — Income tax: abolition of non-residents’ personal reliefs

Schedules
Schedule 1
Section 5

Income tax: abolition of non-residents’ personal reliefs
Introduction
1
Chapter 1 of Part 7 of ICTA (income tax: personal reliefs) is amended as
5
follows.
Abolition of reliefs
2
Omit—
(a)
section 256 (general),
(b)
section 256A (“adjusted net income”),
10
(c)
section 256B (“the minimum amount”),
(d)
section 257 (personal allowance),
(e)
sections 257A to 257BB (married couple’s allowance etc),
(f)
section 257C (indexation),
(g)
section 265 (blind person’s allowance),
15
(h)
section 273 (payments securing annuities), and
(i)
section 278 (non-residents).
Consequential amendments
3     (1)
Section 266 (life assurance premiums) is amended as follows.
      (2)
In subsection (1)—
20
(a)
for “individual” substitute “eligible individual”, and
(b)
omit “or makes a payment falling within subsection (7) below”.
      (3)
After that subsection insert—
“(1A)
For the purposes of subsection (1) above an individual is an eligible
individual if the individual—
25
(a)
is resident in the United Kingdom, or
(b)
meets the conditions in section 56(3) of ITA 2007.”
      (4)
In subsection (3), omit “(7),”.
      (5)
In subsection (4), for “subsections (7) and” substitute “subsection”.
      (6)
Omit subsection (7).
30
      (7)
In subsection (8), for “and is entitled to relief by virtue of section 278(2) or
(2ZA)” substitute “(but is entitled to relief by virtue of subsection (1A)(b))”.

Finance Bill
Schedule 1 — Income tax: abolition of non-residents’ personal reliefs
69

4     (1)
Section 274 (limits on relief under sections 266 and 273) is amended as
follows.
      (2)
In subsection (1), omit “or other sums”.
      (3)
In subsection (2)—
(a)
for “sections 266 and 273” substitute “section 266”, and
5
(b)
omit “or sums”, and
(c)
for “the appropriate rate” substitute “12.5%”.
      (4)
Omit subsection (3).
      (5)
In subsection (4), “or other sum” (in both places).
      (6)
In the heading, for “sections 266 and 273” substitute “section 266”.
10
5
In paragraph 6(1) of Schedule 14 (provisions ancillary to section 266), omit “,
otherwise than in accordance with subsection (7) of that section,”.
Repeals
6
Omit—
(a)
in TMA 1970—
15
(i)
in section 36(3A), “section 257BA of the principal Act or”,
(ii)
in section 37A, “section 257BB or 265 of the principal Act or”,
and
(iii)
in section 43A(2A)(a), “section 257BA of the principal Act or”,
(b)
in FA 1988, section 33 and, in Schedule 3, paragraphs 8 and 10,
20
(c)
in FA 1989, section 33(4)(a), (5)(b), (8)(a) and (9)(b),
(d)
in F(No.2)A 1992, in Schedule 5, paragraphs 2, 8(4) and 9(3),
(e)
in FA 1993, section 107(3)(a),
(f)
in FA 1994, section 77(1) and (2),
(g)
in FA 1996, in Schedule 20, paragraph 14(3) and, in Schedule 21,
25
paragraphs 4 to 6,
(h)
in FA 1997, section 56(2),
(i)
in FA 1998, section 27(1)(a) and, in Schedule 3, paragraph 10,
(j)
in FA 1999, sections 25(3), 31 and 32,
(k)
in FA 2000, section 39(8) and (9),
30
(l)
in ITEPA 2003, in Schedule 6, paragraph 35,
(m)
in FA 2004, in Schedule 35, paragraph 12,
(n)
in ITTOIA 2005, in Schedule 1, paragraph 124,
(o)
in ITA 2007—
(i)
in section 23, in Step 3, “or section 257 or 265 of ICTA”,
35
(ii)
in sections 26(1)(a) and 27(5), “or section 257A, 257AB, 257BA
or 257BB of ICTA”,
(iii)
in section 423(5), “or section 257 or 265 of ICTA”, “or section
257A, 257AB, 257BA or 257BB of ICTA”, “or section 266(7) of
ICTA” and “or section 273 of ICTA”,
40
(iv)
in section 811, in subsection (5), “or section 278(2) of ICTA”
and, in subsection (6), “or section 257 or 265 of ICTA”, “or
section 257A, 257AB, 257BA or 257BB of ICTA” and “or
section 273 of ICTA”,
(v)
in section 833(5), “or section 258 of ICTA”,
45

Finance Bill
Schedule 2 — Income tax rates
Part 1 — Amendments of ITA 2007
70

(vi)
in Schedule 1, paragraphs 27 to 35, 36(5) and (6), 37 and
232(2), and
(vii)
in Schedule 2, Part 4,
(p)
in FA 2008—
(i)
in section 2(1) and (2), paragraph (b) and the “and” before it,
5
(ii)
in section 3, in subsection (1), “and section 257(2) of ICTA”
and “and section 257(3) of ICTA” and, in subsection (2),
paragraph (b) and the “and” before it, and
(iii)
in Schedule 39, paragraphs 18 to 20, and
(q)
in this Act, in section 3(1) and (2), paragraph (b) and the “and” before
10
it.
Commencement
7
The amendments made by this Schedule have effect for the tax year 2010-11
and subsequent tax years.
Schedule 2
15
Section 6

Income tax rates
Part 1
Amendments of ITA 2007
1
ITA 2007 is amended as follows.
2     (1)
Section 6 (rates of income tax) is amended as follows.
20
      (2)
In subsection (2), for “and higher rate” substitute “, higher rate and
additional rate”.
      (3)
In the heading, for “and higher rate” substitute “, higher rate and additional
rate”.
3     (1)
Section 8 (dividend ordinary rate and dividend upper rate) is amended as
25
follows.
      (2)
Insert at the end—
“(3)
The dividend additional rate is 42.5%.”
      (3)
In the heading, for “and dividend upper rate” substitute “, dividend upper
rate and dividend additional rate”.
30
4     (1)
Section 10 (income charged at basic and higher rates: individuals) is
amended as follows.
      (2)
In subsection (3), insert at the end “and up to the higher rate limit.”
      (3)
After that subsection insert—
“(3A)
Income tax is charged at the additional rate on an individual’s
35
income above the higher rate limit.”

Finance Bill
Schedule 2 — Income tax rates
Part 1 — Amendments of ITA 2007
71

      (4)
After subsection (5) insert—
“(5A)
The higher rate limit is £150,000.”
      (5)
In subsection (6), for “is” substitute “and higher rate limit are”.
      (6)
In the heading, for “and higher” substitute “, higher and additional”.
5     (1)
Section 13 (income charged at dividend ordinary and dividend upper rates:
5
individuals) is amended as follows.
      (2)
After subsection (2) insert—
“(2A)
Income tax is charged at the dividend additional rate on an
individual’s income which—
(a)
is dividend income,
10
(b)
would otherwise be charged at the additional rate, and
(c)
is not relevant foreign income charged in accordance with
section 832 of ITTOIA 2005.
      (3)
In subsection (3), for “and (2)” substitute “to (2A)”.
      (4)
In subsection (4), for “or higher” substitute “, higher or additional”.
15
      (5)
In the heading, for “and dividend upper” substitute “, dividend upper and
dividend additional”.
6
In section 414(2)(b) (relief for gifts to charity), after “limit” insert “and the
higher rate limit”.
7
In section 515(a) (rate of tax in respect of heritage maintenance settlements),
20
for “higher rate” substitute “additional rate”.
8     (1)
Section 989 (definitions) is amended as follows.
      (2)
After the definition of “Act” insert—
““additional rate” means the rate of income tax determined in
pursuance of section 6(2),”.
25
      (3)
After the definition of “distribution” insert—
““dividend additional rate” means the rate of income tax
specified in section 8(3),”.
      (4)
After the definition of “higher rate” insert—
““higher rate limit” has the meaning given by section 10,”.
30
9     (1)
Schedule 4 (index of defined expressions) is amended as follows.
      (2)
After the entry relating to “Act” insert—

“additional rate
section 6(2) (as applied by

section 989)”.

      (3)
In the entry relating to “basic rate limit”, for “20(2)” substitute “10”.
35
      (4)
After the entry relating to “dividends (in Chapter 1 of Part 13)” insert—