Scotland Act 1998

76 Changes to income tax structure

(1) This section applies where—

(a) there has been a proposal for the modification of any provision made by or under the Income Tax Acts,

(b) that proposal is one made and published by the Treasury or the Board, or (without having been so made and published) appears to the Treasury to be a proposal to which effect is likely to be given by Act of Parliament, and

(c) it appears to the Treasury that the proposed modification would have a significant effect on the practical extent for any year of assessment of the Parliament’s tax-varying powers.

(2) It shall be the duty of the Treasury, as soon as reasonably practicable after the publication of the proposal, or (as the case may be) as soon as reasonably practicable after it first appears to the Treasury that the proposal is likely to be enacted, to lay before the House of Commons—

(a) a statement of whether, in the Treasury’s opinion, an amendment of the Parliament’s tax-varying powers is required as a consequence of the proposal, and

(b) if in their opinion an amendment of those powers is required, the Treasury’s proposals for amending those powers.

(3) Any proposals for amending the Parliament’s tax-varying powers that are laid before the House of Commons by the Treasury under this section—

(a) must be confined to income tax,

(b) must appear to the Treasury to satisfy the conditions set out in subsections (4) and (5), and

(c) must not contain any proposal for the Parliament’s tax-varying powers to be exercisable in relation to the taxation of income from savings or distributions.

(4) The first condition mentioned in subsection (3)(b) is that the proposals would secure—

(a) so far as possible, and

(b) after making due allowance for annual changes in the retail prices index,

that the practical extent of the Parliament’s tax-varying powers would remain broadly the same from year to year as it would be if (apart from any resolution of the Parliament) the law relating to income tax were the same from year to year as it was in relation to the year 1997-98.

(5) The second condition so mentioned is that the proposals would not enable the Parliament’s tax-varying powers to be exercised for any year of assessment so as to have an effect on the levels of the after-tax income of Scottish taxpayers generally that would be significantly different from the effect their exercise could have had in any previous year of assessment.

(6) References in this section to the practical extent of the Parliament’s tax-varying powers are references to the amounts of income tax for any year of assessment which appear to be or (as the case may be) to have been the maximum amounts capable of being raised and foregone in that year in pursuance of a resolution of the Parliament.

(7) In this section “income from savings or distributions” means income which, had it been income for the year 1998-99, would have been income to which section 1A of the [1988 c. 1.] Income and Corporation Taxes Act 1988 applied for that year.