Finance Act 2008 (c. 9)

Part 2 U.K. Income tax, corporation tax and capital gains tax_general

Miscellaneous U.K.

67 Income of beneficiaries under settlor-interested settlements U.K.

(1) In section 685A of ITTOIA 2005 (settlor-interested settlements), after subsection (5) insert—

“(5A) If the recipient of the annual payment is treated by subsection (3) as having paid income tax in respect of the annual payment, the amount of the payment is treated as the highest part of the recipient's total income for all income tax purposes except the purposes of sections 535 to 537 (gains from contracts for life insurance etc: top slicing relief).

(5B) See section 1012 of ITA 2007 (relationship between highest part rules) for the relationship between—

(a) the rule in subsection (5A), and

(b) other rules requiring particular income to be treated as the highest part of a person's income.”

(2) In section 1012(4) of ITA 2007 (relationship between rules on highest part of total income), after the entry relating to section 465A of ITOIA 2005 insert— “ section 685A(5A) of ITTOIA 2005 (payments from trustees of settlor-interested settlements to be treated as highest part of total income), ”.

(3) The amendments made by this section have effect for the tax year 2006-07 and subsequent tax years.

68 Income charged at dividend upper rate U.K.

(1) In section 13(2) of ITA 2007 (income charged at dividend upper rate: individuals)—

(a) omit “and” at the end of paragraph (a), and

(b) at the end of paragraph (b) insert “, and

(c) is not relevant foreign income charged in accordance with section 832 of ITTOIA 2005.”

(2) The amendments made by subsection (1) have effect for the tax year 2008-09 and subsequent tax years.

69 Payments on account of income tax U.K.

(1) In section 964 of ITA 2007, omit subsection (5) (sums representing income tax deducted from annual payments not to be taken into account for the purpose of calculating amounts to be paid on account of income tax).

(2) The repeal made by subsection (1) has effect for the purpose of calculating the amount of any payments to be made under section 59A of TMA 1970 on account of liability to income tax for the tax year 2008-09 and subsequent tax years.

70 Allowances etc for non-resident nationals of an EEA state U.K.

(1) In section 278 of ICTA (non-residents eligible for reliefs)—

(a) in subsection (2)(a), omit “or an EEA national”, and

(b) omit subsection (9).

(2) In section 56(3) of ITA 2007 (non-UK residents eligible for personal allowances and tax reductions), before paragraph (a) insert—

“(za) is a national of an EEA state,”.

(3) Accordingly, omit section 145 of FA 1996 (personal reliefs for non-resident EEA nationals).

(4) The amendments made by this section have effect for the tax year 2008-09 and subsequent tax years.