Income and Corporation Taxes Act 1988

CHAPTER IV U.K. SPECIAL PROVISIONS

313 Taxation of consideration for certain restrictive undertakings. U.K.

F1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F1 S. 313 repealed (6.4.2003 with effect in accordance with s. 723(1) of the repealing Act) by Income Tax (Earnings and Pensions) Act 2003 (c. 1), Sch. 6 para. 39, Sch. 8 Pt. 1(with Sch. 7)

314 Divers and diving supervisors. U.K.

M1 (1) Where the duties of any employment which are performed by a person in the United Kingdom or a designated area consist wholly or mainly—

(a) of taking part, as a diver, in diving operations concerned with the exploration or exploitation of the seabed, its subsoil and their natural resources; or

(b) of acting, in relation to any such diving operations, as a diving supervisor,

the Income Tax Acts shall have effect as if the performance by that person of those duties constituted the carrying on by him of a trade within Case I of Schedule D; [F2 and accordingly any employment income taken into account in computing the profits or gains of that trade is not chargeable under Part 2 of ITEPA 2003.]

(2) In this section “designated area” means any area designated under section 1(7) of the M2 Continental Shelf Act 1964.

Textual Amendments

F2 Words in s. 314(1) substituted (6.4.2003 with effect in accordance with s. 723(1) of the amending Act) by Income Tax (Earnings and Pensions) Act 2003 (c. 1), Sch. 6 para. 40 (with Sch. 7)

Marginal Citations

M1 Source-1978 s.29(1), (2)

M2 1964 c. 29.

315 Wounds and disability pensions. U.K.

F3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F3 Ss. 315-318 repealed (6.4.2003 with effect in accordance with s. 723(1) of the repealing Act) by Income Tax (Earnings and Pensions) Act 2003 (c. 1), Sch. 6 para. 41, Sch. 8 Pt. 1 (with Sch. 7)

316 Allowances, bounties and gratuities. U.K.

F4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F4 Ss. 315-318 repealed (6.4.2003 with effect in accordance with s. 723(1) of the repealing Act) by Income Tax (Earnings and Pensions) Act 2003 (c. 1), Sch. 6 para. 41, Sch. 8 Pt. 1 (with Sch. 7)

317 Victoria Cross and other awards. U.K.

F5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F5 Ss. 315-318 repealed (6.4.2003 with effect in accordance with s. 723(1) of the repealing Act) by Income Tax (Earnings and Pensions) Act 2003 (c. 1), Sch. 6 para. 41, Sch. 8 Pt. 1 (with Sch. 7)

318 Other pensions in respect of death due to war service etc. U.K.

F6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F6 Ss. 315-318 repealed (6.4.2003 with effect in accordance with s. 723(1) of the repealing Act) by Income Tax (Earnings and Pensions) Act 2003 (c. 1), Sch. 6 para. 41, Sch. 8 Pt. 1 (with Sch. 7)

319 Crown servants: foreign service allowance. U.K.

F7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F7 S. 319 repealed (6.4.2003 with effect in accordance with s. 723(1) of the repealing Act) by Income Tax (Earnings and Pensions) Act 2003 (c. 1), Sch. 6 para. 42, Sch. 8 Pt. 1 (with Sch. 7)

320 Commonwealth Agents-General and official agents etc. U.K.

M3 (1) An Agent-General who is resident in the United Kingdom shall be entitled to the same immunity from income tax as that to which the head of a mission so resident is entitled under the M4 Diplomatic Privileges Act 1964.

(2) Any person having or exercising any employment to which this subsection applies (not being a person employed in any trade, business or other undertaking carried on for the purposes of profit) shall be entitled to the same immunity from income tax as that to which a member of the staff of a mission is entitled under the Diplomatic Privileges Act 1964.

(3) The employments to which subsection (2) above applies are the employment in the United Kingdom as—

(a) a member of the personal staff of any Agent-General; or

(b) an official agent for, or for any state or province of, any of the countries for the time being mentioned in Schedule 3 to the M5 British Nationality Act 1981 or the Republic of Ireland; or

(c) an official agent for any self-governing colony,

of a person certified by the High Commissioner of the country in question or, as the case may be, by the Agent-General for the state, province or self-governing colony in question to be ordinarily resident outside the United Kingdom and to be resident in the United Kingdom solely for the purpose of the performance of his duties as such member or official agent.

(4) In this section—

• “Agent-General” means the Agent-General for any state or province of a country within subsection (3)(b) above or for any self-governing colony;

• “High Commissioner” includes the head of the mission of a country within subsection (3)(b) above by whatever name called;

• “mission” has the same meaning as in the Diplomatic Privileges Act 1964, and references to the head of a mission and a member of the staff of a mission shall be construed in accordance with that Act;

• “self-governing colony” means any colony certified by a Secretary of State to be a self-governing colony.

Modifications etc. (not altering text)

C1 The countries mentioned in the British Nationality Act 1981 Sch.3 (as amended)are—Countries whose citizens are Commonwealth citizensAntigua and Barbuda, Australia, The Bahamas, Bangladesh, Barbados, Belize, Botswana, Brunei, Canada, Republic of Cyprus, Dominica, Fiji, The Gambia, Ghana, Grenada, Guyana, India, Jamaica, Kenya, Kiribati, Lesotho, Malawi, Malaysia, Maldives, Malta, Mauritius, Nauru, New Zealand, Nigeria, Papua New Guinea, Saint Christopher and Nevis, Saint Lucia, Saint Vincent and the Grenadines, Seychelles, Sierra Leone, Singapore, Solomon Islands, Sri Lanka, Swaziland, Tanzania, Tonga, Trinidad and Tobago, Tuvalu, Uganda, Vanuatu, Western Samoa, Zambia, Zimbabwe.

Marginal Citations

M3 Source-1970 s.372

M4 1964 c. 81.

M5 1981 c. 81.

321 Consuls and other official agents. U.K.

F8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F8 S. 321 repealed (6.4.2003 with effect in accordance with s. 723(1) of the repealing Act) by Income Tax (Earnings and Pensions) Act 2003 (c. 1), Sch. 6 para. 43, Sch. 8 Pt. 1 (with Sch. 7)

322 Consular officers and employees. U.K.

M6 (1) Where a consular officer or employee in the United Kingdom of any foreign state to which this section applies—

(a) is not a British citizen, a British Dependent Territories citizen [F9 , a British National (Overseas)] or a British Overseas citizen, and

(b) is not engaged in any trade, profession, vocation or employment in the United Kingdom, otherwise than as such a consular officer or employee, and

(c) either is a permanent employee of that state or was not ordinarily resident in the United Kingdom immediately before he became a consular officer or employee in the United Kingdom of that state;

then [F10 any qualifying income of the consular officer or employee] shall be exempt from income tax, F11 . . . .

[F12 (1A) In subsection (1) “qualifying income” means—

(a) income falling within Case IV or V of Schedule D,

(b) income to which section 573 or 629 of ITEPA 2003 applies (foreign pensions and pre-1973 pensions paid under the Overseas Pensions Act 1973),

(c) income arising from a source outside the United Kingdom to which section 609, 610, 611 or 633 of ITEPA 2003 applies (certain employment-related annuities and voluntary annual payments), and

(d) a benefit to which section 678 of ITEPA applies (foreign benefits).]

(2) F13 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3) For the purposes of this section “consular employee” includes any person employed, for the purposes of the official business of a consular officer, at any consulate or consular establishment or at any other premises used for those purposes.

(4) This section shall apply to any foreign state to which Her Majesty by Order in Council directs that it shall apply for the purpose of giving effect to any consular convention or other arrangement with that state making similar provision in the case of Her Majesty’s consular officers or employees in that state.

(5) An Order in Council under subsection (4) above—

(a) may limit the operation of this section in relation to any state in such manner as appears to Her Majesty to be necessary or expedient having regard to the arrangement with that state;

(b) may be made so as to have effect from a date earlier than the making of the Order or the passing of this Act (but not earlier than the coming into force of the arrangement with regard to which it is made); and

(c) may contain such transitional provisions as appear to Her Majesty to be necessary or expedient;

and any statutory instrument under this section shall be subject to annulment in pursuance of a resolution of the House of Commons.

Textual Amendments

F9 1990 s.89and Sch.14 para.4(1) (correction of errors)—deemed always to have had effect.

F10 Words in s. 322(1) substituted (6.4.2003 with effect in accordance with s. 723(1) of the amending Act) by Income Tax (Earnings and Pensions) Act 2003 (c. 1), Sch. 6 para. 44(2) (with Sch. 7)

F11 Words in s. 322(1) repealed (with effect in accordance with s. Sch. 7 para. 32 of the repealing Act) by Finance Act 1996 (c. 8), Sch. 7 para. 15, Sch. 41 Pt. 5, Note (with Sch. 7 paras. 33-35)

F12 S. 322(1A) inserted (6.4.2003 with effect in accordance with s. 723(1) of the amending Act) by Income Tax (Earnings and Pensions) Act 2003 (c. 1), Sch. 6 para. 44(3) (with Sch. 7)

F13 S. 322(2) repealed (6.4.2003 with effect in accordance with s. 723(1) of the repealing Act) by Income Tax (Earnings and Pensions) Act 2003 (c. 1), Sch. 6 para. 44(4), Sch. 8 Pt. 1 (with Sch. 7)

Modifications etc. (not altering text)

C2 For orders see Part III Vol.5.

Marginal Citations

M6 Source-1970 s.374(1), (3)-(7)

323 Visiting forces. U.K.

M7 (1) F14 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(2) A period during which a member of a visiting force to whom [F15 section 303(1) of ITEPA 2003 (exemption for earnings of visiting forces etc.)] applies is in the United Kingdom by reason solely of his being a member of that force shall not be treated for the purposes of income tax either as a period of residence in the United Kingdom or as creating a change of his residence or domicile.

(3) Subsection (2) above shall not affect the operation of section 278 in relation to any person for any year of assessment.

(4) In [F16 subsection (2)] above references to a visiting force shall apply to a civilian component of such a force as they apply to the force itself; and [F17 that subsection] shall be construed as one with the [F18 Part 1 of]M8 Visiting Forces Act 1952, but so that, for the purposes of this section, references to a designated country shall be substituted in that Act for references to a country to which a provision of that Act applies.

(5) For the purpose of conferring on persons attached to any designated allied headquarters the like benefits as are conferred by [F19 subsection (2)] above on members of a visiting force or civilian component, any members of the armed forces of a designated country shall, while attached to any such headquarters, be deemed to constitute a visiting force of that country, and there shall be a corresponding extension of the class of persons who may be treated as members of a civilian component of such a visiting force.

(6) In the case of persons of any category for the time being agreed between Her Majesty’s government in the United Kingdom and the other members of the North Atlantic Council—

(a) employment by a designated allied headquarters shall be treated for the purposes of subsection (2) above as if it were service as a member of a visiting force of a designated country; F20 . . .

(b) F20 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(7) F21 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(8) For the purposes of this section—

• “allied headquarters” means any international military headquarters established under the North Atlantic Treaty, and

• “designated” means designated for the purpose in question by or under any Order in Council made for giving effect to any international agreement.

Textual Amendments

F14 S. 323(1) repealed (6.4.2003 with effect in accordance with s. 723(1) of the repealing Act) by Income Tax (Earnings and Pensions) Act 2003 (c. 1), Sch. 6 para. 45(2), Sch. 8 Pt. 1 (with Sch. 7)

F15 Words in s. 323(2) substituted (6.4.2003 with effect in accordance with s. 723(1) of the amending Act) by Income Tax (Earnings and Pensions) Act 2003 (c. 1), Sch. 6 para. 45(3) (with Sch. 7)

F16 Words in s. 323(4) substituted (6.4.2003 with effect in accordance with s. 723(1) of the amending Act) by Income Tax (Earnings and Pensions) Act 2003 (c. 1), Sch. 6 para. 45(4)(a) (with Sch. 7)

F17 Words in s. 323(4) substituted (6.4.2003 with effect in accordance with s. 723(1) of the amending Act) by Income Tax (Earnings and Pensions) Act 2003 (c. 1), Sch. 6 para. 45(4)(b) (with Sch. 7)

F18 Words in s. 323(4) inserted (6.4.2003 with effect in accordance with s. 723(1) of the amending Act) by Income Tax (Earnings and Pensions) Act 2003 (c. 1), Sch. 6 para. 45(4)(c) (with Sch. 7)

F19 Words in s. 323(5) substituted (6.4.2003 with effect in accordance with s. 723(1) of the amending Act) by Income Tax (Earnings and Pensions) Act 2003 (c. 1), Sch. 6 para. 45(5) (with Sch. 7)

F20 S. 323(6)(b) and preceding word repealed (6.4.2003 with effect in accordance with s. 723(1) of the repealing Act) by Income Tax (Earnings and Pensions) Act 2003 (c. 1), Sch. 6 para. 45(6), Sch. 8 Pt. 1 (with Sch. 7)

F21 S. 323(7) repealed (6.4.2003 with effect in accordance with s. 723(1) of the repealing Act) by Income Tax (Earnings and Pensions) Act 2003 (c. 1), Sch. 6 para. 45(7), Sch. 8 Pt. 1 (with Sch. 7)

Modifications etc. (not altering text)

C3 For orders see Part III Vol.5under

“Securities”.

Marginal Citations

M7 Source-1970 s.367

M8 1952 c. 67.

324 Designated international organisations. U.K.

M9 (1) The Treasury may by order designate for the purposes of this section—

(a) any international organisation—

(i) if one of its members is the United Kingdom or any of the Communities; and

(ii) if the agreement under which that member became a member provides for exemption from tax, in relation to the organisation, of the kind for which provision is made by this section; or

(b) any of the Communities or the European Investment Bank.

(2) Where an organisation has been so designated, a person not resident in the United Kingdom shall not be liable to income tax in respect of income from any security issued by the organisation if he would not be liable but for the fact that—

(a) the security or income is issued, made payable or paid in the United Kingdom or in sterling; or

(b) the organisation maintains an office or other place of business in the United Kingdom.

Marginal Citations

M9 Source-1984 s.126(1), (2), (3)(a), (4); 1985 s.96(1)

325 Interest on deposits with National Savings Bank. U.K.

• Where the total income of an individual for the year of assessment includes, or would but for this section include, any sums paid or credited in respect of interest on deposits with the National Savings Bank, other than investment deposits, those sums shall be disregarded for all purposes of the Income Tax Acts, other than the furnishing of information, if or in so far as they do not exceed £70;and for this purpose the question whether or how far those sums exceed £70shall, where by virtue of section 279a woman’s income is deemed to be her husband’s, be determined separately as regards the part of his income which is his by virtue of that section and the part which is his apart from that sectionF22 .

Textual Amendments

F22 Words repealed by 1988(F) s.148and Sch.14 Part VIIIfor 1990-91and subsequent years.

326 Interest etc. under contractual savings schemes. U.K.

M10 (1) Any terminal bonus, or interest or other sum, payable under a certified contractual savings scheme—

(a) in respect of money raised under section 12 of the M11 National Loans Act 1968, or

(b) in respect of shares in a building society, [F23 or

(c) in respect of money paid to [F24 a person falling within section 840A(1)(b)],][F25 or

(d) in respect of money paid to a relevant European institution,]

shall [F26 not be regarded as income for any income tax purpose.]

(2) In this section “certified contractual savings scheme” means, except in relation to a building society [F27 or [F24 a person falling within section 840A(1)(b)]][F28 or a relevant European institution], [F29 a share option linked scheme]—

(a) governed by regulations made under section [F30 11 of the M12 National Debt Act 1972]; and

(b) providing for periodical contributions by individuals for a specified period, and the repayment in accordance with the regulations of contributions together with any additional sum by way of bonus or interest, and

(c) certified by the Treasury as qualifying for exemption under this section.

(3) In this section “certified contractual savings scheme” means, in relation to a building society, [F29 a share option linked scheme]—

(a) providing for periodical contributions by individuals for a specified period, being contributions by way of investment in shares in the building society, and

(b) certified by the Treasury as [F31 fulfilling such requirements as the Treasury may specify for the purposes of this section], and as qualifying for exemption under this section.

[F32 (4) In this section “certified contractual savings scheme” means, in relation to [F24 a person falling within section 840A(1)(b)], [F29 a share option linked scheme]—

(a) providing for periodical contributions by individuals for a specific period, and

(b) certified by the Treasury as [F31 fulfilling such requirements as the Treasury may specify for the purposes of this section], and as qualifying for exemption under this section.]

[F33 (5) In this section “certified contractual savings scheme” means, in relation to a relevant European institution, a share option linked scheme—

(a) providing for periodical contributions by individuals for a specified period, and

(b) certified by the Treasury as [F31 fulfilling such requirements as the Treasury may specify for the purposes of this section], and as qualifying for exemption under this section.]

[F34 (6) Any terminal bonus, interest or other sum payable under a scheme shall not be treated as payable under a certified contractual savings scheme for the purposes of this section if—

(a) the contract under which the sum is payable provides for contributions to be made by way of investment in a building society or to be made to [F24 a person falling within section 840A(1)(b)] or to a relevant European institution, and

(b) neither the requirement under subsection (7) below nor that under subsection (8) below is fulfilled.

(7) The requirement under this subsection is that—

(a) when the contract is entered into there is Treasury authorisation for the society [F35 , person] or institution concerned to enter into contracts under the scheme, and

(b) the authorisation was given without any conditions being imposed.

(8) The requirement under this subsection is that—

(a) when the contract is entered into there is Treasury authorisation for the society [F35 , person] or institution concerned to enter into contracts under the scheme,

(b) the authorisation was given subject to conditions being met, and

(c) the conditions are met when the contract is entered into.]

[F36 (9) Schedule 15A to this Act (which contains provisions supplementing this section) shall have effect.]

Textual Amendments

F23 1990 s.29(a).

F24 Words in s. 326(1)(c)(2)(4)(6)(a) substituted (1.12.2001 in accordance with art. 1(2)(a) of the amending S.I.) by The Financial Services and Markets Act 2000 (Consequential Amendments) (Taxes) Order 2001 (S.I. 2001/3629), art. 19(2)

F25 S. 326(1)(d) and preceding word inserted (with application in accordance with Sch. 12 para. 3(5) of the amending Act) by Finance Act 1995 (c. 4), Sch. 12 para. 3(2)

F26 1990 s.29(b).Previously

“be disregarded for all purposes of the Income Tax Acts.”

F27 1990 s.29(c).

F28 Words in s. 326(2) inserted (1.5.1995) by Finance Act 1995 (c. 4), Sch. 12 para. 3(3)

F29 Words in s. 326(2)(3)(4) substituted (with application in accordance with Sch. 12 para. 2(3) of the amending Act) by Finance Act 1995 (c. 4), Sch. 12 para. 2(1)(2)

F30 1990 s.89and Sch.14 para.5 (correction of errors)—deemed always to have had effect. Previously

“12 of the National Debt Act 1958 or section 52 of the Finance Act 1969”.

F31 Words in s. 326(3)(b)(4)(b)(5)(b) substituted (with application in accordance with Sch. 12 para. 4(3) of the amending Act) by Finance Act 1995 (c. 4), Sch. 12 para. 4(2); S.I. 1995/1778, art. 2

F32 1990 s.29(d).

F33 S. 326(5) inserted (1.5.1995) by Finance Act 1995 (c. 4), Sch. 12 para. 3(4)

F34 S. 326(6)-(8) inserted (with application in accordance with Sch. 12 para. 5(2) of the amending Act) by Finance Act 1995 (c. 4), Sch. 12 para. 5(1)

F35 Words in s. 326(7)(a)(8)(a) inserted (1.12.2001 in accordance with art. 1(2)(a) of the amending S.I.) by The Financial Services and Markets Act 2000 (Consequential Amendments) (Taxes) Order 2001 (S.I. 2001/3629), art. 19(3)

F36 S. 326(9) inserted (1.5.1995) by Finance Act 1995 (c. 4), Sch. 12 para. 6(1)

Modifications etc. (not altering text)

C4 See 1988(F) Sch.12 para.7—application of s.326to building society transfers.

Marginal Citations

M10 Source-1970 s.415(1)-(3), (5)

M11 1968 c. 13.

M12 1972 c. 65.

[F37 326A Tax-exempt special savings accounts. U.K.

(1) Subject to the provisions of section 326B, any interest or bonus payable on a deposit account in respect of a period when it is a tax-exempt special savings account shall not be regarded as income for any income tax purpose.

(2) An account is a “tax-exempt special savings account” for the purposes of this section if the conditions set out in subsections (3) to (9) below and any further conditions prescribed by regulations made by the Board are satisfied when the account is opened; and subject to section 326B it shall continue to be such an account until the end of the period of five years beginning with the day on which it is opened, or until the death of the account-holder if that happens earlier.

(3) The account must be opened on or after 1st January 1991 [F38 and before 6th April 1999] by an individual aged 18 or more.

(4) The account must be with a building society or [F39 a person falling within section 840A(1)(b)][F40 or a relevant European institution].

(5) The account must be identified as a tax-exempt special savings account and the account-holder must not simultaneously hold any other such account (with the same or any other society [F41 , person] or institution).

(6) The account must not be a joint account.

(7) The account must not be held on behalf of a person other than the account-holder.

(8) The account must not be connected with any other account held by the account-holder or any other person; and for this purpose an account is connected with another if—

(a) either was opened with reference to the other, or with a view to enabling the other to be opened on particular terms, or with a view to facilitating the opening of the other on particular terms, and

(b) the terms on which either was opened would have been significantly less favourable to the holder if the other had not been opened.

(9) There must not be in force a notice given by the Board to the society [F41 , person] or institution prohibiting it from operating new tax-exempt special savings accounts.

[F42 [F43 (10) In this section “relevant European institution” means an EEA firm of the kind mentioned in paragraph 5(b) of Schedule 3 to the Financial Services and Markets Act 2000 which has permission under paragraph 15 of that Schedule (as a result of qualifying for authorisation under paragraph 12 of that Schedule) to accept deposits.]]]

Textual Amendments

F37 Ss. 326A-326C inserted by Finance Act 1990 (c. 29), s. 28(1)

F38 Words in s. 326A(3) inserted (31.7.1998) by Finance Act 1998 (c. 36), s. 78

F39 Words in s. 326A(4) substituted (1.12.2001 in accordance with art. 1(2)(a) of the amending S.I.) by The Financial Services and Markets Act 2000 (Consequential Amendments) (Taxes) Order 2001 (S.I. 2001/3629), art. 20(2)

F40 Words in s. 326A(4) inserted (with application in accordance with s. 63(5) of the amending Act) by Finance Act 1995 (c. 4), s. 63(2)

F41 Words in s. 326A(5)(9) inserted (1.12.2001 in accordance with art. 1(2)(a) of the amending S.I.) by The Financial Services and Markets Act 2000 (Consequential Amendments) (Taxes) Order 2001 (S.I. 2001/3629), art. 20(3)(4)

F42 S. 326A(10) inserted (with application in accordance with s. 63(5) of the amending Act) by Finance Act 1995 (c. 4), s. 63(3)

F43 S. 326A(10) substituted (1.12.2001 in accordance with art. 1(2)(a) of the amending S.I.) by The Financial Services and Markets Act 2000 (Consequential Amendments) (Taxes) Order 2001 (S.I. 2001/3629), art. 20(5)

326B Loss of exemption for special savings accounts. U.K.

(1) A tax-exempt special savings account shall cease to be such an account if at any time after it is opened any of the conditions set out in subsections (4) to (8) of section 326A, or any further condition prescribed by regulations made by the Board, is not satisfied, or if any of the events mentioned in subsection (2) below occurs.

(2) The events referred to in subsection (1) above are—

(a) the deposit of more than £3,000 in the account during the period of 12 months beginning with the day on which it is opened, more than £1,800 in any of the succeeding periods of 12 months, or more than £9,000 in total;

(b) a withdrawal from the account which causes the balance to fall below an amount equal to the aggregate of—

(i) all the sums deposited in the account before the time of the withdrawal, and

(ii) an amount equal to income tax at the [F44 applicable rate on any interest or bonus paid on the account before that time;]

(c) the assignment of any rights of the account-holder in respect of the account, or the use of such rights as security for a loan.

[F45 (2A) In subsection (2)(b)(ii) above “the applicable rate” means—

(a) in the case of interest or bonus paid before 6th April 1996, the basic rate for the year of assessment in which the payment was made; and

(b) in any other case, the lower rate for the year of assessment in which it was made.]

(3) If at any time an account ceases to be a tax-exempt special savings account by virtue of subsection (1) above, the Income Tax Acts shall have effect as if immediately after that time the society [F46 , person] or institution had credited to the account an amount of interest equal to the aggregate of any interest and bonus payable in respect of the period during which the account was a tax-exempt special savings account.

Textual Amendments

F44 Words in s. 326B(2)(b)(ii) substituted (with effect as mentioned in Sch. 6 paras. 7(3), 28 of the amending Act) by Finance Act 1996 (c. 8), Sch. 6 para. 7(1)

F45 S. 326B(2A) inserted (with effect as mentioned in Sch. 6 paras. 7(3), 28 of the amending Act) by Finance Act 1996 (c. 8), Sch. 6 para. 7(2)

F46 Word in s. 326B(3) inserted (1.12.2001 in accordance with art. 1(2)(a) of the amending S.I.) by The Financial Services and Markets Act 2000 (Consequential Amendments) (Taxes) Order 2001 (S.I. 2001/3629), art. 20(6)

Modifications etc. (not altering text)

C5 S. 326B(3) modified (2.1.1996) by The Tax-exempt Special Savings Account (Relevant European Institutions) Regulations 1995 (S.I. 1995/3239), reg. 7

[F47 326BB Follow-up TESSAs. U.K.

(1) Subsection (2) below applies where—

(a) an individual, within the period of six months from the day on which a tax-exempt special savings account held by him matured, opens another account (“a follow-up account”) which is a tax-exempt special savings account at the time it is opened; and

(b) the total amount deposited in the matured account, before it matured, exceeded £3,000.

(2) In relation to the follow-up account section 326B(2)(a) shall apply as if the reference to £3,000 were a reference to the total amount so deposited.

(3) For the purposes of subsection (1) above a tax-exempt special savings account held by an individual matures when a period of five years throughout which the account was a tax-exempt special savings account comes to an end.

(4) An account is not connected with another account for the purposes of section 326A(8) merely because one of them is a follow-up account.]

Textual Amendments

F47 S. 326BB inserted (1.5.1995) by Finance Act 1995 (c. 4), s. 62(2)

326C Tax-exempt special savings accounts: supplementary. U.K.

(1) The Board may make regulations—

(a) prescribing conditions additional to those set out in section 326A which must be satisfied if an account is to be or remain a tax-exempt special savings account;

(b) making provision for the giving by the Board to building societies and other [F48 persons and] institutions of notices prohibiting them from operating new tax-exempt special savings accounts, including provision about appeals against the giving of notices;

(c) requiring building societies and other [F48 persons and] institutions operating or proposing to operate tax-exempt special savings accounts to give information or send documents to the Board or to make documents available for inspection;

[F49 (cc) providing that subsection (2) of section 326BB does not apply in relation to a follow-up account unless at such time as may be prescribed by the regulations the building society [F50 , person] or institution with which the account is held has a document of a prescribed description containing such information as the regulations may prescribe;

(cd) requiring building societies and other [F48 persons and] institutions operating tax-exempt special savings accounts which mature to give to the individuals who have held them certificates containing such information as the regulations may prescribe;]

(d) making provision as to the transfer of tax-exempt special savings accounts from one building society [F50 , person] or institution to another;

(e) generally for supplementing the provisions of sections 326A [F51 326B and 326BB].

[F52 (1A) In paragraph (cc) of subsection (1) above “document” includes a record kept by means of a computer; and regulations made by virtue of that paragraph may prescribe different documents for different cases.

(1B) Subsection (3) of section 326BB applies for the purposes of subsection (1) above as it applies for the purposes of subsection (1) of that section.]

(2) The reference in section 326A to a deposit account shall be taken to include a reference to a share account with a building society, and accordingly that section, [F53 sections 326B and 326BB] and subsection (1) above shall apply to such an account with the necessary modifications.

Textual Amendments

F48 Words in s. 326C(1)(b)(c)(cd) inserted (1.12.2001 in accordance with art. 1(2)(a) of the amending S.I.) by The Financial Services and Markets Act 2000 (Consequential Amendments) (Taxes) Order 2001 (S.I. 2001/3629), art. 20(7)(a)

F49 S. 326C(1)(cc)(dd) inserted (1.5.1995) by Finance Act 1995 (c. 4), s. 62(3)

F50 Words in s. 326C(1)(cc)(d) inserted (1.12.2001 in accordance with art. 1(2)(a) of the amending S.I.) by The Financial Services and Markets Act 2000 (Consequential Amendments) (Taxes) Order 2001 (S.I. 2001/3629), art. 20(7)(b)

F51 Words in s. 326C(1)(e) substituted (1.5.1995) by Finance Act 1995 (c. 4), s. 62(4)

F52 S. 326C(1A)(1B) inserted (1.5.1995) by Finance Act 1995 (c. 4), s. 62(5)

F53 Words in s. 326C(2) substituted (1.5.1995) by Finance Act 1995 (c. 4), s. 62(6)

[F54 326D Tax-exempt special savings accounts: tax representatives. U.K.

(1) Without prejudice to the generality of section 326C(1), the Board may make regulations providing that an account held with a relevant European institution shall not be a tax-exempt special savings account at the time it is opened, or shall cease to be a tax-exempt special savings account at a given time, unless at the time concerned one of the following three requirements is fulfilled.

(2) The first requirement is that—

(a) a person who falls within subsection (5) below is appointed by the institution to be responsible for securing the discharge of prescribed duties which fall to be discharged by the institution, and

(b) his identity and the fact of his appointment have been notified to the Board by the institution.

(3) The second requirement is that there are other arrangements with the Board for a person other than the institution to secure the discharge of such duties.

(4) The third requirement is that there are other arrangements with the Board designed to secure the discharge of such duties.

(5) A person falls within this subsection if—

(a) he is not an individual and has a business establishment in the United Kingdom, or

(b) he is an individual and is resident in the United Kingdom.

(6) Different duties may be prescribed as regards different institutions or different descriptions of institution.

(7) The regulations may provide that—

(a) the first requirement shall not be treated as fulfilled unless the person concerned is of a prescribed description;

(b) the appointment of a person in pursuance of that requirement shall be treated as terminated in prescribed circumstances.

(8) The regulations may provide that—

(a) the second requirement shall not be treated as fulfilled unless the person concerned is of a prescribed description;

(b) arrangements made in pursuance of that requirement shall be treated as terminated in prescribed circumstances.

(9) The regulations may provide as mentioned in subsection (10) below as regards a case where—

(a) in accordance with the first requirement a person is at any time appointed to be responsible for securing the discharge of duties, or

(b) in accordance with the second requirement there are at any time arrangements for a person to secure the discharge of duties.

(10) In such a case the regulations may provide that the person concerned—

(a) shall be entitled to act on the institution’s behalf for any of the purposes of the provisions relating to the duties;

(b) shall secure (where appropriate by acting on the institution’s behalf) the institution’s compliance with and discharge of the duties;

(c) shall be personally liable in respect of any failure of the institution to comply with or discharge any such duty as if the duties imposed on the institution were imposed jointly and severally on the institution and the person concerned.

(11) Regulations under this section may include provision that section 326B(3) shall have effect as if the reference to subsection (1) included a reference to the regulations.

(12) In this section “prescribed” means prescribed by the regulations.]

Textual Amendments

F54 S. 326D inserted (1.5.1995) by Finance Act 1995 (c. 4), s. 63(4)

327 Disabled person’s vehicle maintenance grant. U.K.

• A grant made under paragraph 2 of Schedule 2 to the M13 National Health Service Act 1977 or section 46(3) of the M14 National Health Service (Scotland) Act 1978 (cost of maintenance etc. of vehicles belonging to disabled persons) or under Article 30 of the M15 Health and Personal Social Services (Northern Ireland) Order 1972 to any person owning a vehicle shall not be treated as income for any purpose of the Income Tax Acts.

Marginal Citations

M13 1977 c. 49.

M14 1978 c. 29.

M15 S.I. 1972/1265 (N.I. 14).

[F55 327A Payments to adopters U.K.

(1) The following payments shall not be treated as income for any purpose of the Income Tax Acts—

(a) any payment or reward falling within section 57(3) of the Adoption Act 1976 (payments authorised by the court) which is made to a person who has adopted, or intends to adopt, a child;

(b) payments under section 57(3A)(a) of that Act (payments by adoption agencies of legal or medical expenses of persons seeking to adopt);

(c) payments of allowances under regulations under section 57A of that Act (permitted allowances to persons who have adopted, or intend to adopt, children) (as at 9th April 2003, see the Adoption Allowance Regulations 1991);

(d) any payment or reward falling within section 51(3) of the Adoption (Scotland) Act 1978 (payments authorised by the court) which is made to a person who has adopted, or intends to adopt, a child;

(e) payments under section 51(4)(a) of that Act (payments by adoption agencies of legal or medical expenses of persons seeking to adopt);

(f) payments of allowances by virtue of section 51B of that Act (transitional provisions) in accordance with a scheme approved by the Secretary of State under section 51(5) of that Act (schemes for payment of allowances to persons who have adopted, or intend to adopt, a child);

(g) payments of allowances in accordance with an adoption allowances scheme under section 51A of that Act;

(h) any payment or reward falling within Article 59(2)(b) of the Adoption (Northern Ireland) Order 1987 (payments authorised by the court) which is made to a person who has adopted, or intends to adopt, a child;

(i) any payment under Article 59(2)(c) of that Order (payments by registered adoption societies) which is made to a person who has adopted, or intends to adopt, a child;

(j) payments of allowances under regulations under Article 59A of that Order (permitted allowances to persons who have adopted, or intend to adopt, children) (as at 9th April 2003, see the Adoption Allowance Regulations (Northern Ireland) 1996);

(k) payments of financial support made in the course of providing adoption support services within the meaning of the Adoption and Children Act 2002 (see sections 2(6) and (7) and 4 of that Act);

(l) payments made under regulations under paragraph 3(1) of Schedule 4 to that Act (transitional and transitory provisions: adoption support services).

(2) The Treasury may by order amend this section for the purposes of—

(a) adding a description of payment, or

(b) removing a description of payment if the power to make a payment of that description has been repealed or revoked or has otherwise ceased to be exercisable.]

Textual Amendments

F55 S. 327A inserted (with effect in accordance with s. 175(2) of the amending Act) by Finance Act 2003 (c. 14), s. 175(1)

F56 328 Funds in court. U.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F56 S. 328 repealed (with effect in accordance with s. 68(3)-(5) of the repealing Act) by Finance Act 1999 (c. 16), s. 68(2), Sch. 20 Pt. 3(17), Note

329 Interest on damages for personal injuries. U.K.

(1) M16 The following interest shall not be regarded as income for any income tax purpose—

(a) any interest on damages in respect of personal injuries to a plaintiff or any other person, or in respect of a person’s death, which is included in any sum for which judgment is given by virtue of a provision to which this paragraph applies; and

(b) any interest on damages or solatium in respect of personal injuries sustained by a pursuer or by any other person, decree for payment of which is included in any interlocutor by virtue of section 1 of the M17 Interest on Damages (Scotland) Act 1958.

(2) M18 The provisions to which subsection (1)(a) above applies are—

(a) section 3 of the M19 Law Reform (Miscellaneous Provisions) Act 1934;

(b) section 17 of the M20 Law Reform (Miscellaneous Provisions) Act (Northern Ireland) 1937;

(c) section 35A of the M21 Supreme Court Act 1981;

(d) section 69 of the M22 County Courts Act 1984;

(e) section 33A of the M23 Judicature (Northern Ireland) Act 1978; and

(f) Article 45A of the M24 County Courts (Northern Ireland) Order 1980.

(3) M25 A payment in satisfaction of a cause of action, including a payment into court, shall not be regarded as income for any income tax purpose to the extent to which it is in respect of interest which would fall within subsection (1) above if included in a sum for which a judgment is given or if decree for payment of it were included in an interlocutor.

(4) M26 In this section “personal injuries” includes any disease and any impairment of a person’s physical or mental condition.

Marginal Citations

M16 Source-1970 s.375A(1); 1971 s.19

M17 1958 c. 61.

M18 Source-1970 s.375A(1B)

M19 1934 c. 41.

M20 1937 c. 9 (N.I.).

M21 1981 c. 54.

M22 1984 c. 28.

M23 1978 c. 23 (N.I.).

M24 S.I. 1980/397 (N.I. 13).

M25 Source-1970 s.375A(1A); 1981 s.39

M26 Source-1970 s.35 7A(2); 1971 s.19

[F57 329AA Personal injury damages in the form of periodical payments. U.K.

[F58 (1) Periodical payments shall not for the purposes of income tax be regarded as the income of any of the persons mentioned in subsection (2) below (and shall be paid without deduction under section 348(1)(b) or 349(1)).

(1A) In subsection (1) “periodical payments” means periodical payments made pursuant to—

(a) an order of a court in so far as it is made in reliance on section 2 of the Damages Act 1996 (including an order as varied), or

(b) an agreement in so far as it settles a claim or action for damages in respect of personal injury (including an agreement as varied).]

(2) The persons referred to in subsection (1) above are—

(a) the person (“A”) entitled to the damages under the agreement or order;

(b) any person who, whether in pursuance of the agreement or order or otherwise, receives the payments or any of them on behalf of A;

(c) any trustee who, whether in pursuance of the agreement or order or otherwise, receives the payments or any of them on trust for the benefit of A under a trust under which A is during his lifetime the sole beneficiary.

(3) The periodical payments referred to in subsection (1) above, or any of them, may, [F59 if the order, agreement or undertaking mentioned in subsection (1A), or a varying order, agreement or undertaking, so provides or permits,] consist of payments under one or more annuities purchased or provided for, or for the benefit of, A by the person by whom the payments would otherwise fall to be made.

(4) Sums paid to, or for the benefit of, A by a trustee or trustees shall not be regarded as his income for the purposes of income tax if made out of payments which by virtue of this section are not to be regarded for those purposes as income of the trustee or trustees.

(5) In this section “personal injury” includes any disease and any impairment of a person’s physical or mental condition.

(6) For the purposes of this section a claim or action for [F60 damages in respect of] personal injury includes—

(a) such a claim or action brought by virtue of the M27 Law Reform (Miscellaneous Provisions) Act 1934;

(b) such a claim or action brought by virtue of the M28 Law Reform (Miscellaneous Provisions) Act (Northern Ireland) 1937;

(c) such a claim or action brought by virtue of the M29 Damages (Scotland) Act 1976;

(d) a claim or action brought by virtue of the M30 Fatal Accidents Act 1976;

(e) a claim or action brought by virtue of the M31 Fatal Accidents (Northern Ireland) Order 1977.

[F61 (7) For the purposes of subsection (1A) above—

(a) the reference to an order of a court made in reliance on section 2 of the Damages Act 1996 includes an order of a court outside the United Kingdom which is similar to an order made in reliance on that section,

(b) the reference to an agreement settling a claim or action includes a reference to an agreement to make payments on account of damages that may be awarded in a claim or action, and

(c) the reference to an agreement in so far as it settles a claim or action for damages in respect of personal injury also includes a reference to an undertaking given by the Motor Insurers' Bureau (being the company of that name incorporated on 14th June 1946 under the Companies Act 1929), or an Article 75 insurer under the Bureau’s Articles of Association, in relation to a claim or action in respect of personal injury.]

F62 (8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .]

Textual Amendments

F57 Ss. 329AA, 329AB inserted (with effect in accordance with s. 150(2)-(4) of the amending Act) by Finance Act 1996 (c. 8), s. 150(1), Sch. 26

F58 S. 329AA(1)(1A) substituted for s. 329AA(1) (1.4.2005) by Courts Act 2003 (c. 39), ss. 100(2)(a), 110(1); S.I. 2005/910, art. 3(w)

F59 Words in s. 329AA(3) substituted (1.4.2005) by Courts Act 2003 (c. 39), ss. 100(2)(b), 110(1); S.I. 2005/910, art. 3(w)

F60 Words in s. 329AA(6) inserted (1.4.2005) by Courts Act 2003 (c. 39), ss. 100(2)(c), 110(1); S.I. 2005/910, art. 3(w)

F61 S. 329AA(7) substituted (1.4.2005) by Courts Act 2003 (c. 39), ss. 100(2)(d), 110(1); S.I. 2005/910, art. 3(w)

F62 S. 329AA(8) repealed (1.4.2005) by Courts Act 2003 (c. 39), ss. 100(2)(e), 110(1), Sch. 10; S.I. 2005/910, art. 3(w)(aa)

Modifications etc. (not altering text)

C6 S. 329AA applied (with modifications) (5.8.2004) by The Thalidomide Children's Trust (Application of Section 329AA of the Income and Corporation Taxes Act 1988) Order 2004 (S.I. 2004/1819), art. 2

C7 S. 329AA applied (1.4.2005) by The Courts Act 2003 (Transitional Provisions, Savings and Consequential Provisions) Order 2005 (S.I. 2005/911), art. 12

Marginal Citations

M27 1934 c. 41.

M28 1937 c. 9 (N.I.).

M29 1976 c. 13.

M30 1976 c. 30.

M31 S.I. 1977/1251 (N.I. 18).

[F57 329AB Compensation for personal injury under statutory or other schemes. U.K.

(1) Section 329AA applies to annuity payments under an award of compensation made under the Criminal Injuries Compensation Scheme as it applies to payments of damages in that form under such an agreement or order as is mentioned in [F63 subsection (1A)] of that section.

(2) In subsection (1) above “the Criminal Injuries Compensation Scheme” means—

(a) the scheme established by arrangements made under the M32 Criminal Injuries Compensation Act 1995; or

(b) arrangements made by the Secretary of State for compensation for criminal injuries and in operation before the commencement of that scheme.

(3) If it appears to the Treasury that any other scheme or arrangement, whether established by statute or otherwise, makes provision for the making of periodical payments by way of compensation for personal injury within the meaning of section 329AA, the Treasury may by order apply that section to those payments with such modifications as the Treasury consider necessary.]

Textual Amendments

F57 Ss. 329AA, 329AB inserted (with effect in accordance with s. 150(2)-(4) of the amending Act) by Finance Act 1996 (c. 8), s. 150(1), Sch. 26

F63 Words in s. 329AB(1) substituted (1.4.2005) by Courts Act 2003 (c. 39), s. 100(3); S.I. 2005/910, art. 3(w)

Marginal Citations

M32 1995 c. 53.

[F64 F65 329A Annuities purchased for certain persons. U.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F64 Ss. 329A, 329B inserted (1.5.1995) by Finance Act 1995 (c. 4), s. 142

F65 Ss. 329A-329C repealed and superseded (29.4 1996) by Finance Act 1996 (c. 8), s. 150(2)(3), Sch. 41 Pt. 5(16) (with s. 150(4))

F66 329B Annuities assigned in favour of certain persons. U.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .]

Textual Amendments

F64 Ss. 329A, 329B inserted (1.5.1995) by Finance Act 1995 (c. 4), s. 142

F66 Ss. 329A-329C repealed and superseded (29.4 1996) by Finance Act 1996 (c. 8), s. 150(2)(3), Sch. 41 Pt. 5(16) (with s. 150(4))

[F67 F68 329C Annuities: criminal injuries. U.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .]

Textual Amendments

F67 S. 329C inserted (8.11.1995) by Criminal Injuries Compensation Act 1995 (c. 53), s. 8

F68 Ss. 329A-329C repealed and superseded (29.4 1996) by Finance Act 1996 (c. 8), s. 150(2)(3), Sch. 41 Pt. 5(16) (with s. 150(4))

330 Compensation for National-Socialist persecution. U.K.

F69 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F69 S. 330 repealed (6.4.2003 with effect in accordance with s. 723(1) of the repealing Act) by Income Tax (Earnings and Pensions) Act 2003 (c. 1), Sch. 6 para. 46, Sch. 8 Pt. 1 (with Sch. 7)

331 Scholarship income. U.K.

M33 (1) Income arising from a scholarship held by a person receiving full-time instruction at a university, college, school or other educational establishment shall be exempt from income tax, and no account shall be taken of any such income in computing the amount of income for income tax purposes.

(2) In this section “scholarship” includes an exhibition, bursary or any other similar educational endowment.

Marginal Citations

M33 Source-1970 s.375(1), (2)

[F70 331A Student loans: certain interest to be disregarded. U.K.

(1) If—

(a) a loan is made to a person under any of the relevant student loan provisions,

(b) an amount is recovered from him in respect of the loan,

(c) an amount is repaid to him in respect of the amount recovered, and

(d) interest is paid to him in respect of the amount repaid,

the interest shall be disregarded for all purposes of income tax.

(2) For the purposes of subsection (1) above the relevant student loan provisions are—

(a) section 22 of the M34 Teaching and Higher Education Act 1998;

(b) section 73(f) of the M35 Education (Scotland) Act 1980;

(c) Article 3 of the M36 Education (Student Support) (Northern Ireland) Order 1998.]

Textual Amendments

F70 S. 331A inserted (27.7.1999) by Finance Act 1999 (c. 16), s. 60

Marginal Citations

M34 1998 c.30

M35 1980 c.44

M36 S.I. 1998/1760 (N.I. 14).

332 Expenditure and houses of ministers of religion. U.K.

M37 (1) F71 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(2) F71 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3) In assessing the income tax chargeable [F72 under Schedule D] upon a clergyman or minister of any religious denomination, the following deductions may be made from any [F73 profits or fees] of his profession or vocation—

(a) any sums of money paid or expenses incurred by him wholly, exclusively and necessarily in the performance of his duty as a clergyman or minister;

(b) such part of the rent (not exceeding one-quarter) as the inspector by whom the assessment is made may allow, paid by him in respect of a dwelling-house any part of which is used mainly and substantially for the purposes of his duty as such clergyman or minister; and

(c) in respect of expenses borne by him in the maintenance, repairs, insurance or management of any premises in which [F74 an interest belongs to a charity or ecclesiastical corporation and, in right of that interest, in which he has a residence from which to perform his duties as a clergyman or minister], such part of the expenses as, together with any deduction allowable in respect of such expenses under paragraph (a) above, is equal to one-quarter of the amount of the expenses.

On an appeal to the General Commissioners or Special Commissioners, the Commissioners shall have jurisdiction to review the inspector’s decision under paragraph (b) above.

[F75 (3A) F76 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3B) F76 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .]

(4) F76 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F71 S. 332(1)(2) repealed (6.4.2003 with effect in accordance with s. 723(1) of the repealing Act) by Income Tax (Earnings and Pensions) Act 2003 (c. 1), Sch. 6 para. 47(2), Sch. 8 Pt. 1 (with Sch. 7)

F72 Words in s. 332(3) substituted (6.4.2003 with effect in accordance with s. 723(1) of the amending Act) by Income Tax (Earnings and Pensions) Act 2003 (c. 1), Sch. 6 para. 47(3)(a) (with Sch. 7)

F73 Words in s. 332(3) substituted (6.4.2003 with effect in accordance with s. 723(1) of the amending Act) by Income Tax (Earnings and Pensions) Act 2003 (c. 1), Sch. 6 para. 47(3)(b) (with Sch. 7)

F74 Words in s. 332(3)(c) substituted (6.4.2003 with effect in accordance with s. 723(1) of the amending Act) by Income Tax (Earnings and Pensions) Act 2003 (c. 1), Sch. 6 para. 47(3)(c) (with Sch. 7)

F75 S. 332(3A)(3B) inserted (with effect in accordance with s. 57(4) of the amending Act) by Finance Act 2001 (c. 9), Sch. 12 para. 10

F76 S. 332(3A)(3B)(4) repealed (6.4.2003 with effect in accordance with s. 723(1) of the repealing Act) by Income Tax (Earnings and Pensions) Act 2003 (c. 1), Sch. 6 para. 47(4), Sch. 8 Pt. 1 (with Sch. 7)

Marginal Citations

M37 Source-1970 s.194; 1977 Sch.8 2, 3; 1987 Sch.15 2(12)

[F77 332A Venture capital trusts: relief. U.K.

Schedule 15B shall have effect for conferring relief from income tax in respect of investments in venture capital trusts and distributions by such trusts.]

Textual Amendments

F77 S. 332A inserted (1.5.1995) by Finance Act 1995 (c. 4), s. 71(1)

333 Personal equity plans. U.K.

M38 (1) The Treasury may make regulations providing that an individual who invests under a plan shall be entitled to relief from income tax in respect of the investments.

[F78 (1A) The plans for which provision may be made by the regulations include, in particular, a plan in the form of an account the subscriptions to which are to be invested in one or more of the ways authorised by the regulations; and, accordingly, references in this section, or in any other enactment, to a plan manager include references to the manager of such an account.]

(2) The regulations shall set out the conditions subject to which plans are to operate and the extent to which investors are to be entitled to relief from tax.

(3) In particular, the regulations may—

(a) specify the description of individuals who may invest and the kind of investments they may make;

(b) specify maximum investment limits F79 . . . ;

(c) provide that investments are to be held by persons (“plan managers”) on behalf of investors;

(d) specify how relief from tax is to be claimed by, and granted to, investors or plan managers on their behalf;

(e) provide that plans and plan managers must be such as are approved by the Board;

(f) specify the circumstances in which approval may be granted and withdrawn.

[F80 (g) provide for plans to be treated as being of different kinds, according to criteria set out in the regulations;

(h) provide that the Board may register a plan as being of a particular kind;

(i) make different provision as to different kinds of plan;

(j) provide for investment by an individual under more than one plan in the same year of assessment.]

(4) The regulations may include provision—

(a) that in prescribed circumstances—

(i) an investor under a plan shall cease to be, and be treated as not having been, entitled to relief from tax in respect of the investments; and

(ii) he or the plan manager concerned (depending on the terms of the regulations) shall account to the Board for tax from which relief has already been given on the basis that the investor was so entitled;

(b) that an investor under a plan or the plan manager concerned (depending on the terms of the regulations) shall account to the Board[F81 either—

(i)] for tax from which relief has been given in circumstances such that the investor was not entitled to it; [F82 or

(ii) for an amount determined in accordance with the regulations to be the amount which is to be taken to represent such tax;]

(c) adapting, or modifying the effect of, any enactment relating to income tax in order to—

(i) secure that investors under plans are entitled to relief from tax in respect of investments;

(ii) secure that investors under plans cease to be, and are treated as not having been, so entitled;

(iii) secure that investors under plans or plan managers account for tax [F83 and other amounts] as mentioned in paragraph (a) or (b) above;

[F84 (ca) adapting or modifying the provisions of Chapter II of Part XIII in relation to cases where—

(i) an investor ceases to be, and is treated as not having been, entitled to relief from tax in respect of investments; or

(ii) an investor who was not entitled to relief has been given relief on the basis that he was;

(cb) securing that plan managers (as well as investors) are liable to account for amounts becoming due from investors as a consequence of any regulations made by virtue of paragraph (ca) above;

(cc) that an investor under a plan or a plan manager is, in prescribed cases where relief has been given to which there was no entitlement, to be liable to a penalty of a prescribed amount, instead of to any obligation to account as mentioned in paragraph (b) or (cb) above;

(cd) that liabilities equivalent to any of those which, by virtue of any of the preceding paragraphs of this subsection, may be imposed in cases where relief has been given to which there was no entitlement are to arise (in place of the liabilities to tax otherwise arising) in other cases where, in relation to any plan—

(i) a prescribed contravention of, or failure to comply with, the regulations, or

(ii) the existence of such other circumstances as may be prescribed,

would have the effect (subject to the provision made by virtue of this paragraph) of excluding or limiting an entitlement to relief;]

(d) that a person who is, or has at any time been, either an investor under a plan or a plan manager—

(i) shall comply with any notice which is served on him by the Board and which requires him within a prescribed period to make available for the Board’s inspection documents (of a prescribed kind) relating to a plan or to investments which are or have been held under it;

(ii) shall, within a prescribed period of being required to do so by the Board, furnish to the Board information (of a prescribed kind) about a plan or about investments which are or have been held under it;

(e) generally for the purpose of bringing plans into existence, and generally for the purpose of the administration of plans and the administration of income tax and corporation tax in relation to them.

(5) In this section “prescribed” means prescribed by the regulations.

Textual Amendments

F78 S. 333(1A) inserted (31.7.1998) by Finance Act 1998 (c. 36), s. 75(1)

F79 Words in s. 333(3)(b) repealed (31.7.1998) by Finance Act 1998 (c. 36), s. 75(2), Sch. 27 Pt. 3(15)

F80 S. 333(3)(g)-(j) inserted by Finance Act 1991 (c. 31, SIF 63:1), s.70

F81 Words in s. 333(4)(b) inserted (31.7.1998) by Finance Act 1998 (c. 36), s. 75(3)(a)

F82 S. 333(4)(b)(ii) and preceding word inserted (31.7.1998) by Finance Act 1998 (c. 36), s. 75(3)(b)

F83 Words in s. 333(4)(c)(iii) inserted (31.7.1998) by Finance Act 1998 (c. 36), s. 75(4)

F84 S. 333(4)(ca)-(cd) inserted (31.7.1998) by Finance Act 1998 (c. 36), s. 75(5)

Modifications etc. (not altering text)

C8 S. 333 modified (31.7.1998) by Finance Act 1998 (c. 36), s. 123(7)

C9 S. 333(2)-(5) applied (with modifications) (6.3.1992 with effect as mentioned in s. 289(1)(2) of the amending Act) by Taxation of Chargeable Gains Act 1992 (c. 12), ss. 151(2), 289 (with ss. 60, 101(1), 171, 201(3)).

C10 For regulations see Part III Vol.5.

Marginal Citations

M38 Source-1986 Sch.8

[F85 333A Personal equity plans: tax representatives. U.K.

(1) Regulations under section 333 may include provision that a European institution cannot be a plan manager unless one of the following three requirements is fulfilled.

(2) The first requirement is that—

(a) a person who falls within subsection (5) below is for the time being appointed by the institution to be responsible for securing the discharge of prescribed duties which fall to be discharged by the institution, and

(b) his identity and the fact of his appointment have been notified to the Board by the institution.

(3) The second requirement is that there are for the time being other arrangements with the Board for a person other than the institution to secure the discharge of such duties.

(4) The third requirement is that there are for the time being other arrangements with the Board designed to secure the discharge of such duties.

(5) A person falls within this subsection if—

(a) he is not an individual and has a business establishment in the United Kingdom, or

(b) he is an individual and is resident in the United Kingdom.

(6) Different duties may be prescribed as regards different institutions or different descriptions of institution.

(7) The regulations may provide that—

(a) the first requirement shall not be treated as fulfilled unless the person concerned is of a prescribed description;

(b) the appointment of a person in pursuance of that requirement shall be treated as terminated in prescribed circumstances.

(8) The regulations may provide that—

(a) the second requirement shall not be treated as fulfilled unless the person concerned is of a prescribed description;

(b) arrangements made in pursuance of that requirement shall be treated as terminated in prescribed circumstances.

(9) The regulations may provide as mentioned in subsection (10) below as regards a case where—

(a) in accordance with the first requirement a person is for the time being appointed to be responsible for securing the discharge of duties, or

(b) in accordance with the second requirement there are for the time being arrangements for a person to secure the discharge of duties.

(10) In such a case the regulations may provide that the person concerned—

(a) shall be entitled to act on the institution’s behalf for any of the purposes of the provisions relating to the duties;

(b) shall secure (where appropriate by acting on the institution’s behalf) the institution’s compliance with and discharge of the duties;

(c) shall be personally liable in respect of any failure of the institution to comply with or discharge any such duty as if the duties imposed on the institution were imposed jointly and severally on the institution and the person concerned.

(11) In this section—

[F86 (a) “European institution” means an EEA firm of the kind mentioned in paragraph 5(a), (b) or (c) of Schedule 3 to the Financial Services and Markets Act 2000 which is an authorised person for the purposes of that Act as a result of qualifying for authorisation under paragraph 12 of that Schedule;]

(b) “prescribed” means prescribed by the regulations.

(12) The preceding provisions of this section shall apply in the case of a relevant authorised person as they apply in the case of a European institution; and “relevant authorised person” here means [F87 a firm which is an authorised person for the purposes of the Financial Services and Markets Act 2000 as a result of qualifying for authorisation under paragraph 2 of Schedule 4 to that Act.]]

Textual Amendments

F85 S. 333A inserted (1.5.1995) by Finance Act 1995 (c. 4), s. 64(1)

F86 S. 333A(11)(a) substituted (1.12.2001 in accordance with art. 1(2)(a) of the amending S.I.) by The Financial Services and Markets Act 2000 (Consequential Amendments) (Taxes) Order 2001 (S.I. 2001/3629), art. 21(2)

F87 Words in s. 333A(12) substituted (1.12.2001 in accordance with art. 1(2)(a) of the amending S.I.) by The Financial Services and Markets Act 2000 (Consequential Amendments) (Taxes) Order 2001 (S.I. 2001/3629), art. 21(3)

[F88 333B Involvement of insurance companies with plans and accounts. U.K.

(1) The Treasury may make regulations providing exemption from tax for income from, and chargeable gains in respect of, investments and deposits of so much of an insurance company’s [F89 long-term insurance fund] as is referable to section 333 business.

(2) The Treasury may by regulations modify the effect of section 30(4) of the M39 Finance (No. 2) Act 1997 (which repeals section 231(2) of the Taxes Act 1988 with effect from 6th April 1999) in relation to distributions which—

(a) are made before 6th April 2004; and

(b) are received by an insurance company in respect of investments of so much of its [F89 long-term insurance fund] as is referable to section 333 business.

(3) Regulations under this section may make provision for insurance companies that are not resident in the United Kingdom to be treated, in relation to investments of so much of their [F89 long-term insurance funds] as are referable to section 333 business—

(a) as if they were so resident for the purposes of any enactment conferring an entitlement to, or to the payment of, tax credits in respect of investments; and

(b) as if such other conditions of any entitlement to, or to the payment of, tax credits were also satisfied.

(4) Regulations under section 333 or this section may include provision which, in relation to insurance companies that are not resident in the United Kingdom—

(a) requires a person to be appointed to be responsible for securing the discharge of any duties to which such an insurance company is subject under the regulations; and

(b) confers rights and powers, and imposes liabilities, on a person so appointed;

and, without prejudice to the generality of paragraphs (a) and (b) above, regulations made by virtue of this subsection may include any provision corresponding to any that, in relation to a European institution, may be made under section 333A.

(5) Regulations under this section may provide that an insurance company—

(a) shall comply with any notice served on it by the Board which requires it, within a prescribed period, to make available for the Board’s inspection documents (of a prescribed kind) relating to, or to matters connected with, its past or present section 333 business; and

(b) shall, within a prescribed period of being required to do so by the Board, furnish to the Board information (of a prescribed kind) about its past or present section 333 business or any matters connected with it.

(6) Any power of the Treasury under this section to make provision by regulations in relation to insurance companies shall include power by regulations to make such corresponding provision in relation to friendly societies as the Treasury think fit.

(7) Regulations under this section may—

(a) for purposes connected with any exemption from tax conferred by virtue of subsection (1) above, apply or modify any provision made by or under the Tax Acts;

(b) make different provision for different cases;

(c) include such incidental, supplemental, consequential and transitional provision as the Treasury may consider appropriate.

(8) Without prejudice to the generality of the powers conferred by subsection (7) above, the provision that may be made in connection with an exemption from tax conferred by virtue of subsection (1) above shall include provision for section 436 to apply (with any such modifications as may be prescribed) in relation to section 333 business as it applies in relation to pension business.

(9) In this section—

• “friendly society” has the same meaning as in Chapter II of Part XII;

• [F90 “insurance company” means an undertaking carrying on the business of effecting or carrying out contracts of insurance and, for the purposes of this definition, “contract of insurance” has the meaning given by Article 3(1) of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001;]

• “ [F89 long-term insurance fund]” has the same meaning as in Chapter I of Part XII;

• “prescribed” means prescribed by regulations under this section;

• “section 333 business”, in relation to an insurance company, means the business of the company that is attributable to the making of investments with that company under plans for which provision is made by regulations under section 333.]

Textual Amendments

F88 S. 333B inserted (31.7.1998) by Finance Act 1998 (c. 36), s. 77(1)

F89 Words in s. 333B(1)(2)(b)(3)(9) substituted (1.12.2001 in accordance with art. 1(2)(a) of the amending S.I.) by The Financial Services and Markets Act 2000 (Consequential Amendments) (Taxes) Order 2001 (S.I. 2001/3629), art. 52(1)(a)

F90 S. 333B(9): definition of "insurance company" substituted (1.12.2001 in accordance with art. 1(2)(a) of the amending S.I.) by The Financial Services and Markets Act 2000 (Consequential Amendments) (Taxes) Order 2001 (S.I. 2001/3629), art. 22

Modifications etc. (not altering text)

C11 S. 333B(1)(5)-(9) modified (6.4.2005) by Child Trust Funds Act 2004 (c. 6), ss. 14, 27; S.I. 2004/3369, art. 2

Marginal Citations

M39 1997 c. 58.