Income and Corporation Taxes Act 1988

CHAPTER I U.K. PERSONAL RELIEFS

The reliefs U.K.

256 General. U.K.

[F1 (1)] M1 An individual who makes a claim in that behalf or, in the case of relief under section 266, who satisfies the conditions of that section, shall be entitled to such relief as is specified in sections 257 to 274, subject however to the provisions of [F2 section 278] and [F3 287 and 288].

[F4 (2) Where under any provision of this Chapter the relief to which a person is entitled for any year of assessment consists in [F5 a tax reduction] calculated by reference to a specified amount, [F6 the amount of the tax reduction is equal to 10 per cent. of the specified amount].

(3) F7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .]

Textual Amendments

F1 S. 256 renumbered as s. 256(1) (with effect as mentioned in s. 77(7) of the amending Act) by Finance Act 1994 c. 9, s. 77(1)

F2 Words in s. 256(1) substituted (6.4.2007 with effect in accordance with s. 1034(1) of the amending Act) by Income Tax Act 2007 (c. 3), Sch. 1 para. 27(2) (with Sch. 2)

F3 “287 and 288”

repealed by 1988(F) Sch.14 Part. VIIIfor 1990-91and subsequent years. And see 1970(M) ss.42and 43—procedure on claims and appeals.

F4 S. 256(2)(3) inserted (with effect as mentioned in s. 77(7) of the amending Act) by Finance Act 1994 c. 9, s. 77(2)

F5 Words in s. 256(2) substituted (6.4.2007 with effect in accordance with s. 1034(1) of the amending Act) by Income Tax Act 2007 (c. 3), Sch. 1 para. 27(3)(a) (with Sch. 2)

F6 Words in s. 256(2) substituted (6.4.2007 with effect in accordance with s. 1034(1) of the amending Act) by Income Tax Act 2007 (c. 3), Sch. 1 para. 27(3)(b) (with Sch. 2)

F7 S. 256(3) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by Income Tax Act 2007 (c. 3), Sch. 1 para. 27(4), Sch. 3 Pt. 1 (with Sch. 2)

Marginal Citations

M1 Source-1970 s.5; 1971 Sch.4 3; 1975 (No.2) s.31(3); 1976 Sch.4 3(1), 18(1)

[F8 256A Meaning of “adjusted net income” U.K.

(1) For the purposes of this Chapter an individual's adjusted net income for a year of assessment is calculated as follows.

Step 1

Take the amount of the individual's net income for the year of assessment.

Step 2

If in the year of assessment the individual makes, or is treated under section 426 of ITA 2007 as making, a gift that is a qualifying donation for the purposes of Chapter 2 of Part 8 of that Act (gift aid) deduct the grossed up amount of the gift.

Step 3

If the individual is given relief in accordance with section 192 of FA 2004 (relief at source) in respect of any contribution paid in the year of assessment under a pension scheme, deduct the gross amount of the contribution.

Step 4

Add back any relief under section 266 of this Act given by virtue of subsection (7) of that section (payments for life insurance etc) that was deducted in calculating the individual's net income for the year of assessment.

The result is the individual's adjusted net income for the year of assessment.

(2) The grossed up amount of a gift is the amount of the gift grossed up by reference to the basic rate for the year of assessment.

(3) The gross amount of a contribution is the amount of the contribution before deduction of tax under section 192(1) of FA 2004.]

Textual Amendments

F8 Ss. 256A, 256B inserted (6.4.2007 with effect in accordance with s. 1034(1) of the amending Act) by Income Tax Act 2007 (c. 3), Sch. 1 para. 28 (with Sch. 2)

[F8 256B Meaning of “the minimum amount” U.K.

In this Chapter “the minimum amount” means £2,350.]

Textual Amendments

F8 Ss. 256A, 256B inserted (6.4.2007 with effect in accordance with s. 1034(1) of the amending Act) by Income Tax Act 2007 (c. 3), Sch. 1 para. 28 (with Sch. 2)

Modifications etc. (not altering text)

C1 S. 256B amended (2008-09) by S.I. 2008/673, art. 2(2)

S. 256B amended (2009-10) by S.I. 2008/3024, art. 2(a)

[F9 257 Personal allowance. U.K.

(1) The claimant shall be entitled to a [F10 personal allowance] of [F11 £3,005].

(2) If the claimant F12 . . . is at any time within the year of assessment of the age of 65 or upwards, he shall be entitled to a [F13 personal allowance] of [F11 £3,670] (instead of [F14 the allowance] provided for by subsection (1) above).

(3) If the claimant F12 . . . is at any time within the year of assessment of the age of [F15 75] or upwards, he shall be entitled to a [F16 personal allowance] of [F11 £3,820] (instead of [F17 the allowance] provided for by subsection (1) or (2) above).

(4) For the purposes of subsections (2) and (3) above a person who would have been of or over a specified age within the year of assessment if he had not died in the course of it shall be treated as having been of that age within that year.

(5) In relation to a claimant whose [F18 adjusted net income] for the year of assessment exceeds [F11 £12,300], subsections (2) and (3) above shall apply as if the amounts specified in them were reduced by [F15 one half] of the excess (but not so as to reduce those amounts below that specified in subsection (1) above).]

[F19 (6) An allowance under this section is given effect at Step 3 of the calculation in section 23 of ITA 2007.]]

Textual Amendments

F9 Ss. 257-257F substituted for s. 257 (1990-91 and subsequent years) by Finance Act 1988 (c. 39), s. 33

F10 Words in s. 257(1) substituted (6.4.2007 with effect in accordance with s. 1034(1) of the amending Act) by Income Tax Act 2007 (c. 3), Sch. 1 para. 29(2) (with Sch. 2)

F11 S.I. 1990 No.677, arts.2(1)(3) (in Part III Vol.5)for 1990-91.

F12 Words in s. 257(2)(3) repealed (with effect as mentioned in s. 134(2) of the repealing Act) by Finance Act 1996 (c. 8), Sch. 20 para. 13, Sch. 41 Pt. 5(10), Note

F13 Words in s. 257(2) substituted (6.4.2007 with effect in accordance with s. 1034(1) of the amending Act) by Income Tax Act 2007 (c. 3), Sch. 1 para. 29(3)(a) (with Sch. 2)

F14 Words in s. 257(2) substituted (6.4.2007 with effect in accordance with s. 1034(1) of the amending Act) by Income Tax Act 2007 (c. 3), Sch. 1 para. 29(3)(b) (with Sch. 2)

F15 1989 s.33 for 1990-91and subsequent years.

F16 Words in s. 257(3) substituted (6.4.2007 with effect in accordance with s. 1034(1) of the amending Act) by Income Tax Act 2007 (c. 3), Sch. 1 para. 29(4)(a) (with Sch. 2)

F17 Words in s. 257(3) substituted (6.4.2007 with effect in accordance with s. 1034(1) of the amending Act) by Income Tax Act 2007 (c. 3), Sch. 1 para. 29(4)(b) (with Sch. 2)

F18 Words in s. 257(5) substituted (6.4.2007 with effect in accordance with s. 1034(1) of the amending Act) by Income Tax Act 2007 (c. 3), Sch. 1 para. 29(5) (with Sch. 2)

F19 S. 257(6) inserted (6.4.2007 with effect in accordance with s. 1034(1) of the amending Act) by Income Tax Act 2007 (c. 3), Sch. 1 para. 29(6) (with Sch. 2)

Modifications etc. (not altering text)

C2 S. 257 amended (1991-92) by S.I. 1991/732, art. 2(3)

S. 257 amended (1992-93) by S.I. 1992/622, art. 2(3)

S. 257 amounts specified (1993-94) by 1993 c. 34, s. 52 (in place of S.I. 1993/755, art. 2(3))

S. 257 amounts specified (1994-95) by 1994 c. 9, s. 76 (in place of S.I. 1993/2948, art. 2(3))

S. 257(1)(5) amended (1995-96) by S.I. 1994/3012, art. 2(3)(a)(d)

S. 257(2)(3) amended (1995-96) by 1995 c. 4, s. 36 (in place of S.I. 1994/3012, art. 2(3)(b)(c))

S. 257(5) amended (1996-97) by S.I. 1995/3031, art. 2(3)(d)

S. 257(1)(2)(3) amended (1996-97) by 1996 c. 8, s. 74(2) (in place of S.I. 1995/3031, art. 2(3)(a)-(c))

S. 257(5) amended (1997-98) by S.I. 1996/2952, art. 2(3)(d)

S. 257(1)(2)(3) amended (1997-98) by 1997 c. 16, s. 55(2) (in place of S.I. 1996/2952, art. 2(3)(a)-(c))

S. 257 amended (1998-99) by S.I. 1998/755, art. 2(3)

S. 257(1) amended (1999-00) by S.I. 1998/2704, art. 2

S. 257(5) amended (1999-00) by S.I. 1999/597, art. 2(3)(c)

S. 257(2)(3) amended (1999-00) by 1999 c. 16, s. 24(1) (in place of S.I. 1999/597, art. 2(3)(a)(b))

S. 257(1) amended (2000-01) by S.I. 1999/3038, art. 2

S. 257(2)(3)(5) amended (2000-01) by S.I. 2000/806, art. 2(3)

S. 257 amended (2001-02) by S.I. 2000/2996, art. 2(2)

S. 257 amended (2002-03) by S.I. 2001/3773, art. 2(2)

S. 257(1) amended (2003-04) by 2002 c. 23, s. 28(1)

S. 257(2)(3) amended (2003-04) by 2002 c. 23, s. 29(1)

S. 257(5) amended (2003-04) by S.I. 2002/2930, art. 2(2)

S. 257(1)(5) amended (2004-05) by S.I. 2003/3215, art. 2(2)(a)(d)

S. 257(2)(3) amended (2004-05) by 2004 c. 12, s. 24(1) (in place of S.I. 2003/3215, art. 2(2)(b)(c))

S. 257(1)(5) amended (2005-06) by S.I. 2004/3161, art. 2(2)(a)(d)

S. 257(2)(3) amended (2005-06) by 2005 c. 7, s. 9(1) (in place of S.I. 2004/3161, art. 2(2)(b)(c))

S. 257(1)(2)(3)(5) amended (2006-07) by S.I. 2005/3327, art. 2(2)

S. 257(1)(2)(3)(5) amended (2007-08) by S.I. 2006/3241, art. 2(2)

S. 257(5) amended (2008-09) by S.I. 2008/673, art. 2(3)(d)

S. 257(1)(2)(3) amended (2008-09) by 2008 c. 9, ss. 2(1)(b), 3(1) (in place of S.I. 2008/673, art. 2(3)(a)-(c))

S. 257(2)(3)(5) amended (2009-10) by S.I. 2008/3024, art. 2(b)(ii)-(iv)

S. 257(1) amended (2009-10) by 2009 c. 10, s. 3(1)(b) (in place of S.I. 2008/3024, art. 2(b)(i))

C3 S. 257(5) modified (6.4.2006) by Finance Act 2004 (c. 12), ss. 192(5), 284(1) (with Sch. 36)

[F20 257AA Children’s tax credit. U.K.

F21 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .]

Textual Amendments

F20 S. 257AA inserted (with effect in accordance with s. 30(5) of the amending Act) by Finance Act 1999 (c. 16), s. 30(1)

F21 S. 257AA repealed (6.4.2003) by Tax Credits Act 2002 (c. 21), s. 61, Sch. 6; S.I. 2003/962, art. 2(3)(e), Sch. 1 (with arts. 3, 5)

257A Married couple’s allowance[F22 (pre-5th December 2005 marriages)]. U.K.

(1) F23 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(2) [F24 If the claimant is, for the whole or any part of the year of assessment, a married man whose wife is living with him [F25 and whose marriage was entered into before 5th December 2005], and] either of them [F26 was born before 6th April 1935], he shall [F27 (subject to subsection (3A) below)] be entitled [F28 for that year to [F29 a tax reduction] calculated by reference to £2,665 ]. . . .

(3) [F24 If the claimant is, for the whole or any part of the year of assessment, a married man whose wife is living with him [F30 and whose marriage was entered into before 5th December 2005], and] either of them

[F31 (a)] is at any time within that year of the age of [F32 75] or upwards,[F33 and

(b) was born before 6th April 1935,]

he shall [F34 (subject to subsection (3A) below)] be entitled [F35 for that year to [F29 a tax reduction] calculated by reference to £2,705 (instead of to the reduction] provided for by subsection F36 . . . (2) above).

[F37 (3A) Subsections (2) and (3) above shall not apply in relation to the claimant for any year of assessment if an election made by the claimant and his wife under section 257AB(1)(c) has effect for that year.]

(4) For the purposes of [F38 subsection (3)] above a person who would have been of or over [F39 the age of 75] within the year of assessment if he had not died in the course of it shall be treated as having been of that age within that year.

(5) In relation to a claimant whose [F40 adjusted net income] for the year of assessment exceeds [F41 £12,300], subsections (2) and (3) above shall apply as if the amounts specified in them were reduced by—

(a) [F32 one half] of the excess, less

(b) any reduction made in his allowance under section 257 by virtue of subsection (5) of that section,

F42 . . .

[F43 (5A) The amounts specified in subsections (2) and (3) above shall not by virtue of subsection (5) above be treated as reduced below [F44 the minimum amount].]

(6) A man shall not be entitled by virtue of this section to more than one [F45 tax reduction] for any year of assessment; and in relation to a claim by a man who becomes married in the year of assessment and has not previously in the year been entitled to relief under this section, this section shall have effect as if the amounts specified in [F46 subsections (2) and (3)] above were reduced by one twelfth for each month of the year ending before the date of the marriage.

• In this subsection “month” means a month beginning with the 6th day of a month of the calendar year.

[F47 (6A) A tax reduction under this section is given effect at Step 6 of the calculation in section 23 of ITA 2007.]

[F48 (7) F49 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(8) F49 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(9) F49 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .]

Textual Amendments

F22 Words in s. 257A heading inserted (5.12.2005 with effect in accordance with reg. 1(4) of the amending S.I.) by The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229), regs. 1(1), 51(5)

F23 S. 257A(1) repealed (with effect as mentioned in s. 31(10), Sch. 20 Pt. 3(3) Note 2 of the repealing Act) by Finance Act 1999 (c. 16), s. 31(2), Sch. 20 Pt. 3(3)

F24 Words in s. 257A(2)(3) substituted (with effect in as mentioned in s. 134(2) of the amending Act) by Finance Act 1996 (c. 8), Sch. 20 para. 14(3)

F25 Words in s. 257A(2) inserted (5.12.2005 with effect in accordance with reg. 1(4) of the amending S.I.) by The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229), regs. 1(1), 51(2)(a)

F26 Words in s. 257A(2) substituted (with effect as mentioned in s. 31(10) of the amending Act) by Finance Act 1999 (c. 16), s. 31(3)(a)

F27 Words in s. 257A(2) inserted (5.12.2005 with effect in accordance with reg. 1(4) of the amending S.I.) by The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229), regs. 1(1), 51(2)(b)

F28 Words in s. 257A(2) substituted (with effect as mentioned in s. 77(7) of the amending Act) by Finance Act 1994 (c. 9), s. 77(2)(b)

F29 Words in s. 257A(2)(3) substituted (6.4.2007 with effect in accordance with s. 1034(1) of the amending Act) by Income Tax Act 2007 (c. 3), Sch. 1 para. 30(2) (with Sch. 2)

F30 Words in s. 257A(3) inserted (5.12.2005 with effect in accordance with reg. 1(4) of the amending S.I.) by The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229), regs. 1(1), 51(3)(a)

F31 Word in s. 257A(3) inserted (with effect as mentioned in s. 31(10) of the amending Act) by Finance Act 1999 (c. 16), s. 31(4)(a)

F32 1989 s.33 for 1990-91and subsequent years.

F33 S. 257A(3)(b) and preceding word inserted (with effect as mentioned in s. 31(10) of the amending Act) by Finance Act 1999 (c. 16), s. 31(4)(b)

F34 Words in s. 257A(3) inserted (5.12.2005 with effect in accordance with reg. 1(4) of the amending S.I.) by The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229), regs. 1(1), 51(3)(b)

F35 Words in s. 257A(3) substituted (with effect as mentioned in s. 77(7) of the amending Act) by Finance Act 1994 (c. 9), s. 77(2)(c)

F36 Words in s. 257A(3) repealed (with effect as mentioned in s. 31(10), Sch. 20 Pt. 3(3) Note 2 of the repealing Act) by Finance Act 1999 (c. 16), s. 31(4)(c), Sch. 20 Pt. 3(3)

F37 S. 257A(3A) inserted (5.12.2005 with effect in accordance with reg. 1(4) of the amending S.I.) by The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229), regs. 1(1), 51(4)

F38 Words in s. 257A(4) substituted (with effect as mentioned in s. 31(10) of the amending Act) by Finance Act 1999 (c. 16), s. 31(5)(a)

F39 Words in s. 257A(4) substituted (with effect as mentioned in s. 31(10) of the amending Act) by Finance Act 1999 (c. 16), s. 31(5)(b)

F40 Words in s. 257A(5) substituted (6.4.2007 with effect in accordance with s. 1034(1) of the amending Act) by Income Tax Act 2007 (c. 3), Sch. 1 para. 30(3) (with Sch. 2)

F41 S.I. 1990 No.677, arts.2(1)(4) (in Part III Vol.5)for 1990-91.

F42 Words in s. 257A(5) repealed (with effect as mentioned in s. 31(11), Sch. 20 Pt. 3(3) Note 1 of the repealing Act) by Finance Act 1999 (c. 16), s. 31(6), Sch. 20 Pt. 3(3) (with s. 32(5))

F43 S. 257A(5A) inserted (with effect as mentioned in s. 31(11) of the amending Act) by Finance Act 1999 (c. 16), s. 31(7) (with s. 32(5))

F44 Words in s. 257A(5A) substituted (6.4.2007 with effect in accordance with s. 1034(1) of the amending Act) by the Income Tax Act 2007 (c. 3), Sch. 1 para. 30(4) (with Sch. 2)

F45 Words in s. 257A(6) substituted (6.4.2007 with effect in accordance with s. 1034(1) of the amending Act) by Income Tax Act 2007 (c. 3), Sch. 1 para. 30(5) (with Sch. 2)

F46 Words in s. 257A(6) substituted (with effect as mentioned in s. 31(10) of the amending Act) by Finance Act 1999 (c. 16), s. 31(8)

F47 S. 257A(6A) inserted (6.4.2007 with effect in accordance with s. 1034(1) of the amending Act) by Income Tax Act 2007 (c. 3), Sch. 1 para. 30(6) (with Sch. 2)

F48 S. 257A(7)-(9) inserted (with effect as mentioned in s. 31(12) of the amending Act) by Finance Act 1999 (c. 16), s. 31(9)

F49 S. 257A(7)-(9) repealed (6.4.2003) by Tax Credits Act 2002 (c. 21), s. 61, Sch. 6; S.I. 2003/962, art. 2(3)(e), Sch. 1 (with arts. 3, 5)

Modifications etc. (not altering text)

C4 Ss. 257A-262 restricted (with effect as mentioned in s. 77(7) of the restricting Act) by Finance Act 1994 (c. 9), Sch. 8 para. 4(1)

C5 S. 257A(2)(3)(5) amended (1991-92) by S.I. 1991/732, art. 2(4)(b)-(d)

S. 257A(1) amended (1991-92) by 1991 c. 31, s. 22(2) (in place of S.I. 1991/732, art. 2(4)(a))

S. 257A(2)(3)(5) amended (1992-93) by S.I. 1992/622, art. 2(4)(b)-(d)

S. 257A(1) amended (1992-93) by 1992 c. 20, s. 10(3)(5) (in place of S.I. 1992/622, art. 2(4)(a))

S. 257A amounts specified (1993-94) by 1993 c. 34, s. 52 (in place of S.I. 1993/755, art. 2(4))

S. 257A(1)(2)(3) amended (1994-95) by S.I. 1993/2948, art. 2(4)(a)-(c)

S. 257A(5) amount specified (1994-95) 1994 c. 9, s. 78 (in place of S.I. 1993/2948, art. 2(4)(d))

S. 257A(1)(2)(3) amended (1995-96) by 1994 c. 9, s. 77(9)

S. 257A(5) amended (1995-96) by S.I. 1994/3012, art. 2(4)

S. 257A amended (1996-97) by S.I. 1995/3031, art. 2(4)

S. 257A amended (1997-98) by S.I. 1996/2952, art. 2(4)

S. 257A amended (1998-99) by S.I. 1998/755, art. 2(4)

S. 257A(2)(3) amended (1999-00) by 1998 c. 36, s. 27(2)

S. 257A amended (1999-00) by S.I. 1999/597, art. 2(4)

S. 257A amended (2000-01) by S.I. 2000/806, art. 2(4)

S. 257A amended (2001-02) by S.I. 2000/2996, art. 2(3)

S. 257A amended (2002-03) by S.I. 2001/3773, art. 2(3)

S. 257A amended (2003-04) by S.I. 2002/2930, art. 2(3)

S. 257A(2)(3)(5)(5A) amended (2004-05) by S.I. 2003/3215, art. 2(3)

S. 257A(2)(3)(5)(5A) amended (2005-06) by S.I. 2004/3161, art. 2(3)

S. 257A(2)(3)(5)(5A) amended (2006-07) by S.I. 2005/3327, art. 2(3)

S. 257A(2)(3)(5)(5A) amended (2007-08) by S.I. 2006/3241, art. 2(3)

S. 257A(2)(3)(5) amended (2008-09) by S.I. 2008/673, art. 2(4)

S. 257A(2)(3)(5) amended (2009-10) by S.I. 2008/3024, art. 2(c)

C6 S. 257A(5) modified (6.4.2006) by Finance Act 2004 (c. 12), ss. 192(5), 284(1) (with Sch. 36)

[F50 257AB Married couple's allowance (post-5th December 2005 marriages and civil partnerships etc.) U.K.

(1) This section applies if —

(a) the claimant is, for the whole or any part of the year of assessment, living with his spouse or civil partner,

(b) either the claimant or his spouse or civil partner was born before 6th April 1935,

(c) the marriage or civil partnership was entered into on or after 5th December 2005 or, if the marriage was entered into before that date, an election for this section to apply has effect for that year, and

(d) the claimant's [F51 net income] for that year exceeds that of his spouse or civil partner or, if they have the same amount of [F51 net income] for that year, the claimant is specified in an election as the person to be entitled to relief under this section for that year.

(2) The claimant shall be entitled for that year to [F52 a tax reduction]—

(a) calculated by reference to £5,975 (if either the claimant or his spouse or civil partner is at any time within that year of the age of 75 or upwards), or

(b) calculated by reference to £5,905 (in any other case).

(3) For the purposes of subsection (2)(a) above an individual who would have been of or over the age of 75 within the year of assessment if he had not died in the course of it shall be treated as having been of that age within that year.

(4) In relation to a claimant whose [F53 adjusted net income] for the year of assessment exceeds £19,500, subsection (2) above applies as if the amounts specified in it were reduced by—

(a) one half of the excess, less

(b) any reduction made in his allowance under section 257 by virtue of subsection (5) of that section.

(5) The amounts specified in subsection (2) above shall not by virtue of subsection (4) above be treated as reduced below [F54 the minimum amount].

(6) An individual shall not be entitled by virtue of this section to more than one [F55 tax reduction] for any year of assessment.

(7) In relation to a claim by an individual who —

(a) becomes a spouse or civil partner in the year of assessment, and

(b) has not previously in the year been entitled to relief under this section,

this section shall have effect as if the amounts specified in subsection (2) above were reduced by one twelfth for each month of the year ending before the date of the marriage or civil partnership.

• In this subsection “month” means a month beginning with the 6th day of a month of the calendar year.

(8) An election under subsection (1)(c) —

(a) shall be made jointly by the parties to the marriage,

(b) shall be made before the first year of assessment for which it is to have effect,

(c) shall have effect for that and each succeeding year of assessment for which any party to the marriage is entitled to relief under this section, and

(d) shall be irrevocable.

(9) An election under subsection (1)(d) —

(a) shall be made jointly by the parties to the marriage or civil partnership, and

(b) shall be made on or before the 5th anniversary of the 31st January next following the end of the year of assessment to which the election relates.

[F56 (10) A tax reduction under this section is given effect at Step 6 of the calculation in section 23 of ITA 2007.]]

Textual Amendments

F50 S. 257AB inserted (5.12.2005 with effect in accordance with reg. 1(4) of the amending S.I.) by The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229), regs. 1(1), 52

F51 Words in s. 257AB(1)(d) substituted (6.4.2007 with effect in accordance with s. 1034(1) of the amending Act) by Income Tax Act 2007 (c. 3), Sch. 1 para. 31(2) (with Sch. 2)

F52 Words in s. 257AB(2) substituted (6.4.2007 with effect in accordance with s. 1034(1) of the amending Act) by Income Tax Act 2007 (c. 3), Sch. 1 para. 31(3) (with Sch. 2)

F53 Words in s. 257AB(4) substituted (6.4.2007 with effect in accordance with s. 1034(1) of the amending Act) by Income Tax Act 2007 (c. 3), Sch. 1 para. 31(4) (with Sch. 2)

F54 Words in s. 257AB(5) substituted (6.4.2007 with effect in accordance with s. 1034(1) of the amending Act) by Income Tax Act 2007 (c. 3), Sch. 1 para. 31(5) (with Sch. 2)

F55 Words in s. 257AB(6) substituted (6.4.2007 with effect in accordance with s. 1034(1) of the amending Act) by Income Tax Act 2007 (c. 3), Sch. 1 para. 31(6) (with Sch. 2)

F56 S. 257AB(10) inserted (6.4.2007 with effect in accordance with s. 1034(1) of the amending Act) by Income Tax Act 2007 (c. 3), Sch. 1 para. 31(7) (with Sch. 2)

Modifications etc. (not altering text)

C7 S. 257AB(2)(4)(5) amended (2006-07) by S.I. 2005/3327, art. 2(4)

S. 257AB(2)(4)(5) amended (2007-08) by S.I. 2006/3241, art. 2(4)

S. 257AB(2)(4) amended (2008-09) by S.I. 2008/673, art. 2(5)

S. 257AB(2)(4) amended (2009-10) by S.I. 2008/3024, art. 2(d)

[F57 257BA Elections as to transfer of relief under section 257A [F58 or 257AB]. U.K.

[F59 (1) An individual may elect that for any year of assessment for which the individual's spouse or civil partner is entitled to a tax reduction under section 257A or 257AB—

(a) the individual shall be entitled (on making a claim) to a tax reduction calculated by reference to half the minimum amount, and

(b) the spouse or civil partner's appropriate amount shall be reduced by half the minimum amount.

(2) An individual and the individual's spouse or civil partner may jointly elect that for any year of assessment for which the individual is entitled to a tax reduction under section 257A or 257AB—

(a) the individual's spouse or civil partner shall be entitled (on making a claim) to a tax reduction calculated by reference to the minimum amount, and

(b) the individual's appropriate amount shall be reduced by the minimum amount.

(3) An individual may elect that for any year of assessment for which the individual's spouse or civil partner is entitled to a tax reduction by virtue of an election under subsection (2) above—

(a) the individual shall be entitled (on making a claim) to a tax reduction calculated by reference to half the minimum amount (in addition to any tax reduction to which the individual is already entitled under section 257A or 257AB), and

(b) the tax reduction to which the spouse or civil partner is entitled by virtue of that election shall be calculated by reference to half the minimum amount (instead of by reference to the minimum amount).]

[F60 (3A) In this section “the appropriate amount” means the amount by reference to which the calculation of the tax reduction is to be made.]

(4) An election under this section shall be made by giving notice to the inspector in such form as the Board may determine and—

(a) subject to subsections (5) and (7) below, shall be made before the first year of assessment for which it is to have effect, and

(b) shall have effect for that and each succeeding year of assessment for which [F61 the individual concerned] is entitled to relief under section 257A [F62 or 257AB], subject to its withdrawal under subsection (8) below or a subsequent election under this section.

(5) An election may be made during the first year of assessment for which it is to have effect if that is the year of assessment in which the marriage [F63 or civil partnership] takes place.

(6) F64 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(7) An election may be made within the first thirty days of the first year of assessment for which it is to have effect if before that year the inspector has been given written notification that it is intended to make the election.

(8) The person or persons by whom an election was made may withdraw it by giving notice to the inspector in such form as the Board may determine; but the withdrawal shall not have effect until the year of assessment after the one in which the notice is given.

(9) [F65 An individual] shall not be entitled by virtue of an election under this section to more than one [F66 tax reduction] for any year of assessment.

[F67 (10) A tax reduction under this section is given effect at Step 6 of the calculation in section 23 of ITA 2007.]]

Textual Amendments

F57 Ss. 257BA, 257BB substituted for s. 257B (16.7.1992 with application in relation to tax for the year 1993-94 and subsequent years of assessment) by Finance (No. 2) Act 1992 (c. 48), s. 20, Sch. 5 paras.2, 10.

F58 Words in s. 257BA heading inserted (5.12.2005 with effect in accordance with reg. 1(4) of the amending S.I.) by The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229), regs. 1(1), 53(9)

F59 S. 257BA(1)-(3) substituted (6.4.2007 with effect in accordance with s. 1034(1) of the amending Act) by Income Tax Act 2007 (c. 3), Sch. 1 para. 32(2) (with Sch. 2 paras. 14, 16(1)(4), 17(1)(5))

F60 S. 257BA(3A) inserted (6.4.2007 with effect in accordance with s. 1034(1) of the amending Act) by Income Tax Act 2007 (c. 3), Sch. 1 para. 32(3) (with Sch. 2 paras. 14, 16(1)(4), 17(1)(5))

F61 Words in s. 257BA(4)(b) substituted (5.12.2005 with effect in accordance with reg. 1(4) of the amending S.I.) by The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229), regs. 1(1), 53(5)(a)

F62 Words in s. 257BA(4)(b) inserted (5.12.2005 with effect in accordance with reg. 1(4) of the amending S.I.) by The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229), regs. 1(1), 53(5)(b)

F63 Words in s. 257BA(5) inserted (5.12.2005 with effect in accordance with reg. 1(4) of the amending S.I.) by The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229), regs. 1(1), 53(6)

F64 S. 257BA(6) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act by Income Tax Act 2007 (c. 3), Sch. 1 para. 32(4), Sch. 3 Pt. 1 (with Sch. 2 paras. 14, 16(1)(4), 17(1)(5))

F65 Words in s. 257BA(9) substituted (5.12.2005 with effect in accordance with reg. 1(4) of the amending S.I.) by The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229), regs. 1(1), 53(8)

F66 Words in s. 257BA(9) substituted (6.4.2007 with effect in accordance with s. 1034(1) of the amending Act) by Income Tax Act 2007 (c. 3), Sch. 1 para. 32(5) (with Sch. 2 paras. 14, 16(1)(4), 17(1)(5))

F67 S. 257BA(10) inserted (6.4.2007 with effect in accordance with s. 1034(1) of the amending Act) by Income Tax Act 2007 (c. 3), Sch. 1 para. 32(6) (with Sch. 2 paras. 14, 16(1)(4), 17(1)(5))

Modifications etc. (not altering text)

C8 S. 257B-262 restricted (with effect as mentioned in s. 77(7) of the amending Act) by Finance Act 1994 (c. 9), Sch. 8 para. 4(1)

F69 257BB Transfer of relief under section 257A where relief exceeds income[F68 or 257AB.] U.K.

[F70 (1) Where—

(a) an individual is entitled to a tax reduction under section 257A or 257AB, but

(b) the amount of the tax reduction to which the individual is entitled is greater than the individual's comparable tax liability,

the individual's spouse or civil partner shall be entitled (in addition to any tax reduction to which that spouse or civil partner is entitled by virtue of an election under section 257BA) to a tax reduction equal to the unused part of the individual's MCA tax reductions.]

[F71 (1A) The individual's MCA tax reductions are the sum of—

(a) the tax reduction to which the individual is entitled under section 257A or 257AB, and

(b) any tax reduction to which the individual is entitled by virtue of an election under section 257BA(3).

(1B) The unused part of the individual's MCA tax reductions is equal to—

(a) the individual's MCA tax reductions, less

(b) the individual's comparable tax liability.]

(2) Subsection (1) above shall not apply for a year of assessment unless the claimant’s [F72 spouse or civil partner] gives notice to the inspector that it is to apply.

[F73 (3) Where—

(a) an individual is entitled to a tax reduction by virtue of an election under section 257BA, but

(b) the amount of the tax reduction to which the individual is entitled is greater than the individual's comparable tax liability,

the individual's spouse or civil partner shall be entitled (in addition to any tax reduction to which that spouse or civil partner is entitled by virtue of section 257A or 257AB) to a tax reduction equal to the unused part of the individual's tax reduction.]

[F74 (3AA) The unused part of the individual's tax reduction is equal to—

(a) the tax reduction to which the individual is entitled by virtue of the election under section 257BA, less

(b) the individual's comparable tax liability.]

(3A) F75 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4) Subsection (3) above shall not apply for a year of assessment unless the claimant’s [F76 spouse or civil partner] gives notice to the inspector that it is to apply.

(5) Any notice under subsection (2) or (4) above—

(a) shall be given on or before the fifth anniversary of the 31st January next following the end of the year of assessment to which it relates,

(b) shall be in such form as the Board may determine, and

(c) shall be irrevocable.

[F77 (5A) For the purposes of this section, the comparable tax liability of an individual is the amount of the individual's tax left after Step 6 of the calculation in section 23 of ITA 2007, making that calculation with the modifications set out in subsections (5B) and (5C).

(5B) In making that calculation, do not deduct any tax reduction under—

(a) section 788 (double taxation arrangements: relief by agreement), or

(b) section 790(1) (relief for foreign tax where there are no double taxation arrangements).

(5C) If the individual's entitlement to a tax reduction under section 257A, 257AB, 257BA or this section is extinguished under section 423(4) of ITA 2007 (gift aid: restriction of reliefs) to any extent, deduct from the amount calculated in accordance with subsections (5A) and (5B) the amount by which the tax reduction is reduced.

(5D) For the purposes of this section a person is treated as being entitled to a tax reduction under section 788 if the person is entitled to credit against income tax under arrangements which have effect under that section.

(5E) A tax reduction under this section is given effect at Step 6 of the calculation in section 23 of ITA 2007.]

(6) F78 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F68 Words in s. 257BB heading inserted (5.12.2005 with effect in accordance with reg. 1(4) of the amending S.I.) by The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229), regs. 1(1), 54(6)

F69 Ss. 257BA, 257BB substituted for s. 257B (16.7.1992 with application in relation to tax for the year 1993-94 and subsequent years of assessment) by Finance (No. 2) Act 1992 (c. 48), s. 20, Sch. 5 paras.2, 10.

F70 S. 257BB(1) substituted (6.4.2007 with effect in accordance with s. 1034(1) of the amending Act) by Income Tax Act 2007 (c. 3), Sch. 1 para. 33(2) (with Sch. 2 paras. 14, 16(1)(5), 17(6))

F71 S. 257BB(1A)(1B) inserted (6.4.2007 with effect in accordance with s. 1034(1) of the amending Act) by Income Tax Act 2007 (c. 3), Sch. 1 para. 33(3) (with Sch. 2 paras. 14, 16(1)(5), 17(6))

F72 Words in s. 257BB(2) substituted (5.12.2005 with effect in accordance with reg. 1(4) of the amending S.I.) by The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229), regs. 1(1), 54(3)

F73 S. 257BB(3) substituted (6.4.2007 with effect in accordance with s. 1034(1) of the amending Act) by Income Tax Act 2007 (c. 3), Sch. 1 para. 33(4) (with Sch. 2 paras. 14, 16(1)(5), 17(6))

F74 S. 257BB(3AA) inserted (6.4.2007 with effect in accordance with s. 1034(1) of the amending Act) by Income Tax Act 2007 (c. 3), Sch. 1 para. 33(5) (with Sch. 2 paras. 14, 16(1)(5), 17(6))

F75 S. 257BB(3A) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act by Income Tax Act 2007 (c. 3), Sch. 1 para. 33(6), Sch. 3 Pt. 1 (with Sch. 2 paras. 14, 16(1)(5), 17(6))

F76 Words in s. 257BB(4) substituted (5.12.2005 with effect in accordance with reg. 1(4) of the amending S.I.) by The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229), regs. 1(1), 54(5)

F77 S. 257BB(5A)-(5E) inserted (6.4.2007 with effect in accordance with s. 1034(1) of the amending Act) by Income Tax Act 2007 (c. 3), Sch. 1 para. 33(7) (with Sch. 2 paras. 14, 16(1)(5), 17(6))

F78 S. 257BB(6) repealed (with effect as mentioned in s. 77(7) of the repealing Act) by Finance Act 1994 (c. 9), Sch. 8 para. 3(4), Sch. 26 Pt. 5(1), Note

Modifications etc. (not altering text)

C9 S. 257B-262 restricted (with effect as mentioned in s. 77(7) of the amending Act) by Finance Act 1994 (c. 9), Sch. 8 para. 4(1)

C10 S. 257BB(5) modified (1992-93, 1993-94 and 1994-5) by The Lloyd's Underwriters (Tax) (1992-93 to 1996-97) Regulations 1995 (S.I. 1995/352), regs. 1, 14, 15, Sch.

F79 257B. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

257C Indexation of amounts in [F83 sections 256B, 257][F84 , 257A and 257AB]. U.K.

(1) If the retail prices index for the month of [F85 September] preceding a year of assessment is higher than it was for the previous [F85 September], then, unless Parliament otherwise determines, [F86 sections 256B, 257]F87 . . . [F88 , 257A and 257AB] shall apply for that year as if for each amount specified in them as they applied for the previous year (whether by virtue of this section or otherwise) there were substituted an amount arrived at by increasing the amount for the previous year by the same percentage as the percentage increase in the retail prices index, and—

(a) if in the case of an amount specified in sections 257(5) [F89 , 257A(5) and 257AB(4)] the result is not a multiple of £100, rounding it up to the nearest amount which is such a multiple;

(b) if in the case of any other amount the increase is not a multiple of £10, rounding the increase up to the nearest amount which is such a multiple.

F90 (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F91 (2A) Subsection (1) above shall not require any change to be made in the amounts deductible or repayable under [F92 PAYE regulations] during the period beginning with 6th April and ending with 17th May in the year of assessment.]

(3) The Treasury shall in each year of assessment make an order specifying the amounts which by virtue of subsection (1) above will be treated as specified for the following year of assessment in [F86 sections 256B, 257]F87 . . . [F93 , 257A and 257AB].

[F94 (4) This section shall have effect in relation to reliefs for the year 1990-91 (as well as for later years);and for that purpose it shall be assumed that sections 257and 257Aapplied for the year 1989-90as they apply, apart from this section, for the year 1990-91.]

Textual Amendments

F83 Words in s. 257C sidenote substituted (6.4.2007 with effect in accordance with s. 1034(1) of the amending Act) by Income Tax Act 2007 (c. 3), Sch. 1 para. 34(3) (with Sch. 2)

F84 Words in s. 257C sidenote substituted (5.12.2005 with effect in accordance with reg. 1(4) of the amending S.I.) by The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229), regs. 1(1), 55(d)

F85 Words in s. 257C(1) substituted (27.7.1993 with effect for the year 1994-95 and subsequent years of assessment) by 1993 c. 34, s. 107(3)(a)(8)

F86 Words in s. 257C(1)(3) substituted (6.4.2007 with effect in accordance with s. 1034(1) of the amending Act) by Income Tax Act 2007 (c. 3), Sch. 1 para. 34(2) (with Sch. 2)

F87 Words in s. 257C(1)(3) repealed (6.4.2003) by Tax Credits Act 2002 (c. 21), s. 61, Sch. 6; S.I. 2003/962, art. 2(3)(e), Sch. 1 (with arts. 3, 5)

F88 Words in s. 257C(1) substituted (5.12.2005 with effect in accordance with reg. 1(4) of the amending S.I.) by The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229), regs. 1(1), 55(a)

F89 Words in s. 257C(1)(a) substituted (5.12.2005 with effect in accordance with reg. 1(4) of the amending S.I.) by The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229), regs. 1(1), 55(b)

F90 S. 257C(2) repealed (27.7.1993 with effect for the year 1994-95 and subsequent years of assessment) by 1993 c. 34, ss. 107(3)(b)(8), 213, Sch. 23 Pt.III

F91 S. 257C(2A) inserted (1999-00 and subsequent years of assessment) by Finance Act 1999 (c. 16), s. 25(3)(4)

F92 Words in s. 257C(2A) 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. 35 (with Sch. 7)

F93 Words in s. 257C(3) substituted (5.12.2005 with effect in accordance with reg. 1(4) of the amending S.I.) by The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229), regs. 1(1), 55(c)

F94 Repealed by 1990 s.132and Sch.19 Part IV.

Modifications etc. (not altering text)

C12 S. 257B-262 restricted (with effect as mentioned in s. 77(7) of the amending Act) by Finance Act 1994 (c. 9), Sch. 8 para. 4(1)

C13 S. 257C applied (2000-01 and subsequent years of assessment) by Finance Act 1999 (c. 16), s. 32(5)

C14 S. 257C(1) excluded (1991-92) by Finance Act 1991 (c. 31, SIF 63:1), s. 22(1)

S. 257C(1) excluded (1992-93) by Finance Act 1992 (c. 20), s. 10(3)(5)

S. 257C(1) excluded (1993-94) by Finance Act 1993 c. 34, s. 52

S. 257C(1) excluded (1994-95) by Finance Act 1994 (c. 9), s. 76

S. 257C(1) excluded (1994-95, 1995-96) by Finance Act 1994 (c. 9), s. 77(10)

S. 257C(1) excluded (1994-95) by Finance Act 1994 (c. 9), s. 78

S. 257C(1) excluded (1995-96) by Finance Act 1995 (c. 4), s. 36

S. 257C(1) excluded (1996-97) by Finance Act 1996 (c. 8), s. 74(1)

S. 257C(1) excluded (1997-98) by Finance Act 1997 (c.16), s. 55(1)

S. 257C(1) excluded (1999-00) by Finance Act 1999 (c. 16), s. 24(2)

S. 257C(1) excluded (2003-04) by Finance Act 2002 (c. 23), ss. 28(2), 29(2)

S. 257C(1) excluded (2004-05) by Finance Act 2004 (c. 12), s. 24(2)

S. 257C(1) excluded (2005-06) by Finance Act 2005 (c. 7), s. 9

S. 257C excluded (2008-09) by Finance Act 2008 (c. 9), ss. 2(2)(b), 3(2)(b)

S. 257C excluded (2009-10) by Finance Act 2009 (c. 10), s. 3(2)(b)

C15 S. 257C(2A) modified (2002-03) by Finance Act 2002 (c. 23), s. 27(b)

C16 See S.I. 1990 No.677in Part III Vol.5for 1990-91.

257D Transitional relief: husband with excess allowances. U.K.

F95 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F95 Ss. 257D-257F repealed (with effect in accordance with s. 32(4), Sch. 20 Pt. 3(3) Note of the repealing Act) by Finance Act 1999 (c. 16), s. 32(2), Sch. 20 Pt. 3(3)

257E Transitional relief: the elderly. U.K.

F96 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F96 Ss. 257D-257F repealed (with effect in accordance with s. 32(4), Sch. 20 Pt. 3(3) Note of the repealing Act) by Finance Act 1999 (c. 16), s. 32(2), Sch. 20 Pt. 3(3)

257F Transitional relief: separated couples. U.K.

F97 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F97 Ss. 257D-257F repealed (with effect in accordance with s. 32(4), Sch. 20 Pt. 3(3) Note of the repealing Act) by Finance Act 1999 (c. 16), s. 32(2), Sch. 20 Pt. 3(3)

F98 258 Widower’s or widow’s housekeeper. U.K.

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

Textual Amendments

F98 S. 258 repealed (1988-89 and subsequent years) by Finance Act 1988 (c. 39), s. 25(3), Sch.14 Part IV

259 Additional relief in respect of children. U.K.

F99 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F99 Ss. 259-261A repealed (with effect in accordance with s. 33(2), Sch. 20 Pt. 3(4) Note of the repealing Act) by Finance Act 1999 (c. 16), s. 33(1), Sch. 20 Pt. 3(4)

260 Apportionment of relief under section 259. U.K.

F100 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F100 Ss. 259-261A repealed (with effect in accordance with s. 33(2), Sch. 20 Pt. 3(4) Note of the repealing Act) by Finance Act 1999 (c. 16), s. 33(1), Sch. 20 Pt. 3(4)

261 Claims under section 259 for year of marriage. U.K.

F101 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F101 Ss. 259-261A repealed (with effect in accordance with s. 33(2), Sch. 20 Pt. 3(4) Note of the repealing Act) by Finance Act 1999 (c. 16), s. 33(1), Sch. 20 Pt. 3(4)

[F102 261A Additional relief in respect of children for year of separation. U.K.

F103 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .]

Textual Amendments

F102 S. 261A inserted (16.7.1992 with application in relation to tax for the year 1993-94 and subsequent years of assessment) by Finance (No. 2) Act 1992 (c. 48), s. 20, Sch. 5 paras.6, 10.

F103 Ss. 259-261A repealed (with effect in accordance with s. 33(2), Sch. 20 Pt. 3(4) Note of the repealing Act) by Finance Act 1999 (c. 16), s. 33(1), Sch. 20 Pt. 3(4)

262 Widow’s bereavement allowance. U.K.

F104 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F104 S. 262 repealed (with effect in accordance with s. 34(2), Sch. 20 Pt. 3(5) Note 1 of the repealing Act) by Finance Act 1999 (c. 16), s. 34(1), Sch. 20 Pt. 3(5) (with s. 34(3))

F105 263 Dependent relatives. U.K.

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

Textual Amendments

F105 S. 263 repealed (1988-89 and subsequent years) by Finance Act 1988 (c. 39), s. 25(3), Sch.14 Part IV

F106 264 Claimant depending on services of a son or daughter. U.K.

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

Textual Amendments

F106 S. 264 repealed (1988-89 and subsequent years) by Finance Act 1988 (c. 39), s. 25(3), Sch.14 Part IV

[F107 265 Blind person’s allowance. U.K.

(1) If the claimant F108 . . . is a registered blind person for the whole or any part of the year of assessment, he shall be entitled to a [F109 blind person's allowance] of [F110 £1,280]F111 . . . .

[F112 (1A) Section 257C (indexation) shall have effect (using the rounding up rule in subsection (1)(b) of that section) for the application of this section for the year 1998-99 and any subsequent year of assessment as it has effect for the application of sections 257 and 257A.]

(2) Where—

(a) a person entitled to [F113 an allowance under subsection (1) above] is a [F114 person whose spouse or civil partner] is living with him for the whole of any part of the year of assessment, but

[F115 (b) the amount to which the person is entitled exceeds the person's remaining relievable income,]

his [F116 spouse or civil partner] shall be entitled to [F117 an allowance] of an amount equal to the excess.

[F118 (2A) The person's remaining relievable income is the amount found by—

(a) taking the amount of the individual's net income, and

(b) subtracting any personal allowance to which the person is entitled.]

(3) F119 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4) F120 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(5) [F121 Subsection (2)] above shall not apply for a year of assessment unless the person entitled to [F122 an allowance] under subsection (1) has given to the inspector written notice that [F123 it is] to apply; and any such notice—

(a) shall be given [F124 on or before the fifth anniversary of the 31st January next following] the end of the year of assessment to which it relates,

(b) shall be in such form as the Board may determine, and

(c) shall be irrevocable.

(6) A notice given under subsection (5) above in relation to a year of assessment by [F125 a spouse or civil partner] shall have effect also as a notice under [F126 section 257BB(2)].

(7) In this section “registered blind person” means a person registered as a blind person in a register compiled under section 29 of the National Assistance Act 1948 or, in the case of a person ordinarily resident in Scotland or Northern Ireland, a person who is a blind person within the meaning of section 64(1) of that Act].

[F127 (8) An allowance under this section is given effect at Step 3 of the calculation in section 23 of ITA 2007.]

Textual Amendments

F107 1988(F) s.35and Sch.3 para.8for 1990-91and subsequent years. Previously

“Relief for blind persons.265.—(1) Subject to subsection (3) below, if the claimant proves—(a) that he is a married man who for the year of assessment has his wife living with him, and that one of them was, and the other was not, a registered blind person for the whole or part of the year; or (b) that, not being such a married man, he was a registered blind person for the whole or part of the year, he shall be entitled to a deduction of £540 from his total income. (2) Subject to subsection (3) below, if the claimant proves—(a) that he is a married man who for the year of assessment has his wife living with him, and (b) that he was a registered blind person for the whole or part of the year and his wife was also a registered blind person for the whole or part of the year, he shall be entitled to a deduction of £1,080 from his total income. (3)Unless a claimant who is entitled to relief for the year of assessment under section 264in respect of the services of a son or daughter relinquishes his claim to that relief, he shall not be allowed relief under this section for that year (Repealed by 1988(F) ss.25(3), 148and Sch.14 Part IVfor 1988-89and subsequent years.). (4) In this section “registered blind person” means a person registered as a blind person in a register compiled under section 29 of the National Assistance Act 1948 or, in the case of a person ordinarily resident in Scotland or in Northern Ireland, a person who is a blind person within the meaning of section 64(1) of that Act.”.And see Table E Vol.1for previous years.

F108 Words in s. 265(1) repealed (with effect as mentioned in s. 134(2) of the repealing Act) by Finance Act 1996, Sch. 20 para. 19, Sch. 41 Pt. 5(10), Note

F109 Words in s. 265(1) substituted (6.4.2007 with effect in accordance with s. 1034(1) of the amending Act) by Income Tax Act 2007 (c. 3), Sch. 1 para. 35(2)(a) (with Sch. 2 paras. 14, 15(1)(3))

F110 Words in s. 265(1) substituted (with effect in accordance with s. 56(3) of the amending Act) by Finance Act 1997 (c. 16), s. 56(1)

F111 Words in s. 265(1) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act by Income Tax Act 2007 (c. 3), Sch. 1 para. 35(2)(b), Sch. 3 Pt. 1 (with Sch. 2 paras. 14, 15(1)(3))

F112 S. 265(1A) inserted (19.3.1997) by Finance Act 1997 (c. 16), s. 56(2)

F113 Words in s. 265(2)(a) substituted (6.4.2007 with effect in accordance with s. 1034(1) of the amending Act) by Income Tax Act 2007 (c. 3), Sch. 1 para. 35(3)(a) (with Sch. 2 paras. 14, 15(1)(3))

F114 Words in s. 265(2)(a) substituted (5.12.2005) by The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229), regs. 1(1), 56(2)

F115 S. 265(2)(b) substituted (6.4.2007 with effect in accordance with s. 1034(1) of the amending Act) by Income Tax Act 2007 (c. 3), Sch. 1 para. 35(3)(b) (with Sch. 2 paras. 14, 15(1)(3))

F116 Words in s. 265(2)(b) substituted (5.12.2005) by The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229), regs. 1(1), 56(3)(a)

F117 Words in s. 265(2) substituted (6.4.2007 with effect in accordance with s. 1034(1) of the amending Act) by Income Tax Act 2007 (c. 3), Sch. 1 para. 35(3)(c) (with Sch. 2 paras. 14, 15(1)(3))

F118 S. 265(2A) inserted (6.4.2007 with effect in accordance with s. 1034(1) of the amending Act) by Income Tax Act 2007 (c. 3), Sch. 1 para. 35(4) (with Sch. 2 paras. 14, 15(1)(3))

F119 S. 265(3) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act by Income Tax Act 2007 (c. 3), Sch. 1 para. 35(5), Sch. 3 Pt. 1 (with Sch. 2 paras. 14, 15(1)(3))

F120 S. 265(4) omitted (5.12.2005) by virtue of The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229), regs. 1(1), 56(4)

F121 Words in s. 265(5) substituted (6.4.2007 with effect in accordance with s. 1034(1) of the amending Act) by Income Tax Act 2007 (c. 3), Sch. 1 para. 35(6)(a) (with Sch. 2 paras. 14, 15(1)(3))

F122 Words in s. 265(5) substituted (6.4.2007 with effect in accordance with s. 1034(1) of the amending Act) by Income Tax Act 2007 (c. 3), Sch. 1 para. 35(6)(b) (with Sch. 2 paras. 14, 15(1)(3))

F123 Words in s. 265(5) substituted (6.4.2007 with effect in accordance with s. 1034(1) of the amending Act) by Income Tax Act 2007 (c. 3), Sch. 1 para. 35(6)(c) (with Sch. 2 paras. 14, 15(1)(3))

F124 Words in s. 265(5)(a) substituted (with effect as mentioned in s. 135(2) of the amending Act) by Finance Act 1996, Sch. 21 para. 6

F125 Words in s. 265(6) substituted (5.12.2005 with effect in accordance with reg. 1(4) of the amending S.I.) by The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229), regs. 1(1), 56(6)

F126 Words in s. 265(6) substituted (16.7.1992 with application in relation to tax for the year 1993-94 and subsequent years of assessment) by Finance (No. 2) Act 1992 (c. 48), s. 20, Sch. 5 paras. 8(4), 10.

F127 S. 265(8) inserted (6.4.2007 with effect in accordance with s. 1034(1) of the amending Act) by Income Tax Act 2007 (c. 3), Sch. 1 para. 35(7) (with Sch. 2 paras. 14, 15(1)(3))

Modifications etc. (not altering text)

C17 S. 265(1) amended (1999-00) by S.I. 1999/597, art. 2(5)

S. 265(1) amended (2000-01) by S.I. 2000/806, art. 2(5)

S. 265(1) amended (2001-02) by S.I. 2001/638, art. 2(3)

S. 265(1) amended (2002-03) by S.I. 2002/707, art. 2(4)

S. 265(1) amended (2003-04) by S.I. 2002/2930, art. 2(4)

S. 265(1) amended (2004-05) by S.I. 2003/3215, art. 2(4)

S. 265(1) amended (2005-06) by S.I. 2004/3161, art. 2(4)

S. 265(1) amended (2006-07) by S.I. 2005/3327, art. 2(5)

S. 265(1) amended (2007-08) by S.I. 2006/3241, art. 2(5)

S. 265(1) amended (2008-09) by S.I. 2008/673, art. 3

S. 265(1) amended (2009-10) by S.I. 2008/3024, art. 3

C18 S. 265(5) modified (1990-91) by The Lloyd's Underwriters (Tax) (1990-91) Regulations 1993 (S.I. 1993/415), regs. 1, 9, Sch. 2

C19 S. 265(5) modified (1991-92) by The Lloyd's Underwriters (Tax) (1991-92) Regulations 1994 (S.I. 1994/728), regs. 1, 9, Sch. 2

S. 265(5) modified (1992-93, 1993-94 and 1994-5) by The Lloyd's Underwriters (Tax) (1992-93 to 1996-97) Regulations 1995 (S.I. 1995/352), regs. 1, 14, 15, Sch.

266 Life assurance premiums. U.K.

(1) M2 Subject to the provisions of this section, [F128 section 274 and Schedules 14 and 15 and sections 192 to 194 of the Finance Act 2004,] an individual who pays any such premium as is specified in subsection (2) below or makes a payment falling within subsection (7) below shall (without making any claim) be entitled to relief under this section.

(2) M3 The premiums referred to in subsection (1) above are any premiums paid by an individual under a policy of insurance or contract for a deferred annuity, where—

(a) the payments are made to —

[F129 (i) a person who has permission under Part 4 of the Financial Services and Markets Act 2000 or under paragraph 15 of Schedule 3 to that Act (as a result of qualifying for authorisation under paragraph 12(1) of that Schedule) to effect or carry out contracts of long-term insurance; or

(ii) a member of the Society who effects or carries out contracts of long-term insurance in accordance with Part 19 of the Financial Services and Markets Act 2000;]

(iv) in the case of a deferred annuity, the National Debt Commissioners; and

(b) the insurance or, as the case may be, the deferred annuity is on the life of the individual or on the life of his spouse [F130 or civil partner]; and

(c) the insurance or contract was made by him or his spouse [F130 or civil partner].

(3) Subject to subsections (7), (10) and (11) below, no relief under this section shall be given—

(a) M4 except in respect of premiums payable under policies for securing a capital sum on death, whether in conjunction with any other benefit or not;

(b) M5 in respect of premiums payable under any policy issued in respect of an insurance made after 19th March 1968 unless the policy is a qualifying policy;

(c) M6 in respect of premiums payable under any policy issued in respect of an insurance made after 13th March 1984 F131 . . . ;

(d) M7 in respect of premiums payable during the period of deferment in respect of a policy of deferred assurance.

(4) M8 Subject to [F132 subsections (7) and (8)] below, relief under this section in respect of any premiums paid by an individual in a year of assessment shall be given by making good to the person to whom they are paid any deficiency arising from the deductions authorised under subsection (5) below; and this section and Schedule 14 shall have effect in relation to any premium or part of a premium which is paid otherwise than in the year of assessment in which it becomes due and payable as if it were paid in that year.

(5) Subject to the provisions of Schedule 14—

(a) an individual resident in the United Kingdom who is entitled to relief under this section in respect of any premium may deduct from any payment in respect of the premium and retain an amount equal to [F133 12.5 per cent.] of the payment; and

(b) the person to whom the payment is made shall accept the amount paid after the deduction in discharge of the individual’s liability to the same extent as if the deduction had not been made and may recover the deficiency from the Board.

(6) F134 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(6A) F134 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(7) M9 Where a person makes a payment to a trade union as defined in section 28(1) of the M10 Trade Union and Labour Relations Act 1974, and part of that payment is attributable to the provision of superannuation, life insurance or funeral benefits, he shall be entitled to relief under this section in respect of that part of the payment, but—

(a) subsection (4) above shall not apply; and

(b) [F135 in calculating his net income there shall be deducted] an amount equal to one-half of that part of the payment.

This subsection shall also apply in relation to any payment made to an organisation of persons in police service but only where the annual amount of the part of the payment attributable to the provision of the benefits in question is £20 or more.

(8) M11 Where the individual is not resident in the United Kingdom [F136 and is entitled] to relief by virtue of section 278(2) [F137 or (2ZA)], subsection (4) above shall not apply but F138 . . . the like relief shall be given to him under paragraph 6 of Schedule 14.

(9) M12 Subsections (5) and (8) above shall apply in relation to an individual who is not resident in the United Kingdom but is a member of the armed forces of the Crown or the [F139 spouse][F140 or civil partner] of such a member as if the individual were so resident.

(10) M13 Subsection (3)(b) above shall not apply—

(a) to any policy of life insurance having as its sole object the provision on an individual’s death or disability of a sum substantially the same as any amount then outstanding under a mortgage of his residence, or of any premises occupied by him for the purposes of a business, being a mortgage the principal amount secured by which is repayable by instalments payable annually or at shorter regular intervals; or

(b) to any policy of life insurance issued in connection with an approved scheme as defined in Chapter I of Part XIV.

In the application of this subsection to Scotland, for any reference to a mortgage there shall be substituted a reference to a heritable security within the meaning of the M14 Conveyancing (Scotland) Act 1924 (but including a security constituted by ex facie absolute disposition or assignation).

(11) M15 Subsection (3)(a) and (d) above shall not affect premiums payable—

(a) under policies or contracts made in connection with any superannuation or bona fide pension scheme for the benefit of the employees of any employer, or of persons engaged in any particular trade, profession, vocation or business, or for the benefit of the [F141 spouse, [F142 civil partner,] widow, widower [F143 , surviving civil partner] or children or other dependants of any such employee or person,] or

(b) under policies taken out by teachers in the schools known in the year 1918 as secondary schools, pending the establishment of a superannuation or pension scheme for those teachers.

(12) Schedule 14 shall have effect for the purpose of modifying, for certain cases, and supplementing the provisions of this section.

[F144 (13) In F145 . . . Schedule 14, “friendly society” means the same as in the Friendly Societies Act 1992 (and includes any society that by virtue of section 96(2) of that Act is to be treated as a registered friendly society within the meaning of that Act).]

[F146 (14) In subsection (2)(a)—

• “contracts of long-term insurance” means contracts which fall within Part II of Schedule 1 to the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001; and

• “member of the society” has the same meaning as in Lloyd’s Act 1982 M16 .]

Textual Amendments

F128 Words in s. 266(1) substituted (6.4.2006) by Finance Act 2004 (c. 12), s. 284(1), Sch. 35 para. 9 (with Sch. 36)

F129 S. 266(2)(a)(i)(ii) substituted for s. 266(2)(a)-(iii) (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. 18(2)

F130 Words in s. 266(2)(b)(c) inserted (5.12.2005) by The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229), regs. 1(1), 57(2)

F131 Words in s. 266(3)(c) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by Income Tax Act 2007 (c. 3), Sch. 1 para. 36(2), Sch. 3 Pt. 1 (with Sch. 2)

F132 Words in s. 266(4) substituted (6.4.2007 with effect in accordance with s. 1034(1) of the amending Act) by Income Tax Act 2007 (c. 3), Sch. 1 para. 36(3) (with Sch. 2)

F133 Words in s. 266(5)(a) substituted (from 6.4.1989) by Finance Act 1988 (c. 39), s. 29

F134 S. 266(6)(6A) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by Income Tax Act 2007 (c. 3), Sch. 1 para. 36(4), Sch. 3 Pt. 1 (with Sch. 2)

F135 Words in s. 266(7)(b) substituted (6.4.2007 with effect in accordance with s. 1034(1) of the amending Act) by Income Tax Act 2007 (c. 3), Sch. 1 para. 36(5) (with Sch. 2)

F136 Words in s. 266(8) substituted (6.4.2007 with effect in accordance with s. 1034(1) of the amending Act) by Income Tax Act 2007 (c. 3), Sch. 1 para. 36(6)(a) (with Sch. 2)

F137 Words in s. 266(8) inserted (6.4.2007 with effect in accordance with s. 1034(1) of the amending Act) by Income Tax Act 2007 (c. 3), Sch. 1 para. 36(6)(b) (with Sch. 2)

F138 Words in s. 266(8) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by Income Tax Act 2007 (c. 3), Sch. 1 para. 36(6)(c), Sch. 3 Pt. 1 (with Sch. 2)

F139 Words in s. 266(9) substituted (1990-91 and subsequent years) by Finance Act 1988 (c. 39), s. 35, Sch. 3 para. 9(a)

F140 Words in s. 266(9) inserted (5.12.2005) by The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229), regs. 1(1), 57(3)

F141 Words in s. 266(11)(a) substituted (1990-91 and subsequent years) by Finance Act 1988 (c. 39), s. 35, Sch. 3 para. 9(b)

F142 Words in s. 266(11)(a) inserted (5.12.2005) by The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229), regs. 1(1), 57(4)(a)

F143 Words in s. 266(11)(a) inserted (5.12.2005) by The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229), regs. 1(1), 57(4)(b)

F144 S. 266(13) inserted (19.2.1993) by Finance (No. 2) Act 1992 (c. 48), s. 56, Sch. 9 paras. 2(3); S.I. 1993/236, art.2

F145 Words in s. 266(13) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by Income Tax Act 2007 (c. 3), Sch. 1 para. 36(7), Sch. 3 Pt. 1 (with Sch. 2)

F146 S. 266(14) added (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. 18(3)

Marginal Citations

M2 Source-1970 s.19(1); 1976 Sch.4 3(1)

M3 Source-1970 s.19(2); 1976 s.36(5), Sch.4 3(2)

M4 Source-1970 s.19(3)(a)

M5 Source-1970 s.19(4)

M6 Source-1984 s.72(1)

M7 Source-1970 s.19(3)(b)

M8 Source-1976 Sch.4 4(1) 5; 1978 Sch.3 2; 1980 s.29(2)(b)

M9 Source-1978 Sch.3 12; 1981 s.33

M10 1974 c. 52.

M11 Source-1976 Sch.4 4(2)

M12 Source-1976 Sch.4 5A; 1978 Sch.3 5

M13 Source-1970 s.19(4)(a), (c); 1971 Sch.3 11

M14 1924 c. 27.

M15 Source-1970 s.19(3)(i)(ii)

M16 1982 c. xiv.

[F147 266A Life assurance premiums paid by employer U.K.

(1) This section applies if—

(a) pursuant to [F148 an employer-financed] retirement benefits scheme, the employer in any year of assessment pays a sum with a view to the provision of any relevant benefits for or in respect of any employee of that employer, and

(b) the payment is made under such an insurance or contract as is mentioned in section 266.

This section applies whether or not the accrual of the relevant benefits is dependent on any contingency.

(2) Relief, if not otherwise allowable, shall be given to that employee under section 266 in respect of the payment to the extent, if any, to which such relief would have been allowable to him if—

(a) the payment had been made by him, and

(b) the insurance or contract under which the payment is made had been made with him.

[F149 (3) For the purposes of subsection (1)(a) benefits are provided in respect of an employee if they are provided for the employee’s spouse, widow or widower, children, dependants or personal representatives.

(4) If a sum within subsection (1) is paid with a view to the provision of benefits for or in respect of more than one employee of the employer, part of it is to be treated as paid for or in respect of each of them.

(5) The amount treated as paid for or in respect of each employee is—

where—

A is the sum paid,

B is the amount which would have had to be paid to secure the benefits to be provided for or in respect of the employee in question, and

C is the total amount which would have had to be paid to secure the benefits to be provided for or in respect of all the employees if separate payments had been made in the case of each of them.

(6) This section does not apply if—

(a) in the year of assessment in which the sum is paid the earnings from the employee’s employment are (or, if there are none, would be if there were any) earnings charged on remittance, or

(b) the employee is not domiciled in the United Kingdom in the tax year in which the sum is paid and the conditions in subsection (7) are met.

(7) Those conditions are—

(a) that the employment is with a foreign employer, and

(b) that, on a claim made by the employee, the Board are satisfied that the pension scheme corresponds to a registered pension scheme.

(8) In subsection (6)(a) “earnings charged on remittance” means earnings which are taxable earnings under—

(a) section 22 of ITEPA 2003 (chargeable overseas earnings for year when employee resident and ordinarily resident, but not domiciled, in UK), or

(b) section 26 of that Act (foreign earnings for year when employee resident, but not ordinarily resident, in UK).

(9) In this section—

• “employer-financed retirement benefits scheme”, and

• “relevant benefits”,

• have the same meaning as in Chapter 2 of Part 6 of ITEPA 2003 (see sections 393A and 393B of that Act).]]

Textual Amendments

F147 S. 266A 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. 36 (with Sch. 7)

F148 Words in s. 266A(1) substituted (6.4.2006) by Finance Act 2004 (c. 12), s. 284(1), Sch. 35 para. 10(2) (with Sch. 36)

F149 S. 266A(3)-(9) substituted for s. 266A(3)-(6) (6.4.2006) by Finance Act 2004 (c. 12), s. 284(1), Sch. 35 para. 10(3) (with Sch. 36)

267 Qualifying policies. U.K.

Schedule 15, Part I of which contains the basic rules for determining whether or not a policy is a qualifying policy, Part II of which makes provision for the certification etc. of policies as qualifying policies and Part III of which modifies Parts I and II in their application to certain policies issued by non-resident companies, shall have effect for the purpose of determining whether or not a policy is a qualifying policy; and, accordingly, any reference in this Act to a qualifying policy shall be construed in accordance with that Schedule.

268 Early conversion or surrender of life policies. U.K.

M17 (1) Where a policy of life insurance to which this section applies has been issued and, within four years from the making of the insurance in respect of which it was issued, any of the following events happens, that is to say—

(a) the surrender of the whole or part of the rights conferred by the policy;

(b) the falling due (otherwise than on death) of a sum payable in pursuance of a right conferred by the policy to participate in profits; and

(c) the conversion of the policy into a paid-up or partly paid-up policy;

the body by whom the policy was issued shall pay to the Board, out of the sums payable by reason of the surrender or, as the case may be, out of the sum falling due or out of the fund available to pay the sums which will be due on death or on the maturity of the policy, a sum determined in accordance with the following provisions of this section, unless the body is wound up and the event is a surrender or conversion effected in connection with the winding-up.

(2) The sum payable under subsection (1) above shall, subject to the following provisions of this section, be equal to the lower of the following, that is to say—

(a) the appropriate percentage of the premiums payable under the policy up to the happening of the event; and

(b) the surrender value of the policy at the time of the happening of the event less the complementary percentage of the premiums mentioned in paragraph (a) above.

(3) If the event is one of those mentioned below, the sum payable to the Board shall not exceed the following limit, that is to say—

(a) if it is the surrender of part of the rights conferred by the policy, the value of the rights surrendered at the time of the surrender;

(b) if it is the conversion of the policy into a partly paid-up policy, the surrender value at the time of the conversion, of so much of the policy as is paid up; and

(c) if it is the falling due of a sum, that sum.

(4) If the event was preceded by the happening of such an event as is mentioned in subsection (1) above, subsection (2) above shall apply—

(a) as if the lower of the amounts mentioned therein were reduced by the sum paid under this section in respect of the earlier event; and

(b) if the earlier event was such an event as is mentioned in paragraph (a) or (c) of subsection (3) above, as if the surrender value of the policy were increased by the amount which, under that paragraph, limited or might have limited the sum payable under this section in respect of the earlier event.

(5) For the purposes of this section the appropriate percentage, in relation to any event, is the percentage equal to the following fraction of the percentage found by doubling that mentioned in section 266(5)(a) as in force for the year of assessment in which the event happened, that is to say—

(a) if the event happens in the first two of the four years mentioned in subsection (1) above, three-sixths;

(b) if it happens in the third of those years, two-sixths; and

(c) if it happens in the last of those years, one-sixth;

and the complementary percentage, in relation to any event, is 100 per cent. less the appropriate percentage.

(6) Where the annual amount of the premiums payable under a policy of life insurance is at any time increased (whether under the policy or by any contract made after its issue) so as to exceed by more than 25 per cent.—

(a) if the insurance was made on or before 26th March 1974, the annual amount as at that date, or

(b) in the case of any other insurance, the first annual amount so payable,

the additional rights attributable to the excess shall be treated for the purposes of this section as conferred by a new policy issued in respect of an insurance made at that time, and the excess shall be treated as premiums payable under the new policy.

(7) This section applies to any policy of life insurance which is a qualifying policy unless—

(a) it is a policy in respect of the premiums on which relief under section 266 is not available by virtue of subsection (3)(c) of that section; or

(b) it is a policy of life insurance issued in connection with [F150 a registered pension scheme;]

and in relation to a policy of life insurance issued in respect of an insurance made before 27th March 1974 applies only in accordance with subsection (6) above.

Textual Amendments

F150 Words in s. 268(7)(b) substituted (6.4.2006) by Finance Act 2004 (c. 12), s. 284(1), Sch. 35 para. 11 (with Sch. 36)

Marginal Citations

M17 Source-1975 s.7; 1976 Sch.4 19(1); 1984 s.72(5)

269 Surrender etc. of policies after four years. U.K.

M18 (1) Where a policy of life insurance to which this section applies has been issued and, in the fifth or any later year from the making of the insurance in respect of which it was issued, either of the following events happens, that is to say—

(a) the surrender of the whole or part of the rights conferred by the policy; and

(b) the falling due (otherwise than on death or maturity) of a sum payable in pursuance of a right conferred by the policy to participate in profits;

then, if either of those events has happened before, the body by whom the policy was issued shall pay to the Board, out of the sums payable by reason of the surrender, or, as the case may be, out of the sum falling due, a sum determined in accordance with the following provisions of this section.

(2) The sum payable under subsection (1) above shall, subject to the following provisions of this section, be equal to the applicable percentage of the lower of the following—

(a) the total of the premiums which are payable in that year under the policy; and

(b) the sums payable by reason of the surrender or, as the case may be, the sum falling due;

and the percentage to be applied for this purpose shall be a percentage equal to that mentioned in section 266(5)(a) as in force for the year of assessment in which the event happens.

(3) Where, after a sum has become payable under subsection (1) above, and within the same year from the making of the insurance, another such event happens as is mentioned therein, the sums payable under that subsection in respect of both or all of the events shall not exceed the applicable percentage of the total mentioned in subsection (2)(a) above.

(4) Where, on the happening of an event in the fifth or any later year from the making of the insurance, any sum is payable under subsection (1) of section 268 as applied by subsection (6) of that section as well as under subsection (1) above, subsection (2) above shall apply as if the sums or sum mentioned in paragraph (b) thereof were reduced by the sum payable under that section.

(5) This section applies to any policy of life insurance which is a qualifying policy unless—

(a) it is a policy in respect of the premiums on which relief under section 266 is not available by virtue of subsection (3)(c) of that section; or

(b) it is a policy issued in the course of an industrial insurance business; or

(c) it was issued in respect of an insurance made before 27th March 1974.

Marginal Citations

M18 Source-1975 s.8; 1976 Sch.4 19(2); 1984 s.72(5)

270 Provisions supplementary to sections 268 and 269. U.K.

M19 (1) Where on the happening of an event in relation to a policy of life insurance a sum is payable under section 268 or 269, relief under section 266 in respect of the relevant premiums paid under the policy shall be reduced by the sum so payable or, as the case may be, by so much of the sum as does not exceed the amount of that relief (or as does not exceed so much of that amount as remains after any previous reduction under this section).

(2) For the purposes of this section the relevant premiums are—

(a) in relation to a sum payable under section 268, the premiums payable under the policy up to the happening of the event by reason of which the sum is payable; and

(b) in relation to a sum payable under section 269, the premiums payable in the year (from the making of the insurance) in which the event happens by reason of which the sum is payable.

(3) Where the relevant premiums are payable in more than one year of assessment the reduction in relief under this section shall, so far as possible, reduce relief for an earlier year of assessment before reducing relief for a later one.

(4) Any sum paid under section 268 or 269 by reason of any event shall be treated—

(a) as between the parties, as received by the person by whom the premiums under the policy were paid; and

(b) for the purposes of section 266, as a sum paid by that person in satisfaction of his liability resulting from the reduction of relief under this section;

and where that sum exceeds that liability he shall be entitled, on a claim made by him not later than six years after the end of the year of assessment in which the event happens, to repayment of the excess.

Marginal Citations

M19 Source-1975 s.9(1)-(4); 1976 Sch.4 19(3)

271 Deemed surrender in cases of certain loans. U.K.

M20 (1) Where—

(a) [F151 by virtue of section 465 of ITTOIA 2005] a gain arising in connection with a policy F152 . . . would be treated as forming part of an individual’s total income; and

(b) the policy was issued in respect of an insurance made after 26th March 1974 F153 . . .; and

(c) any sum is at any time after the making of the insurance F152 . . . lent to or at the direction of that individual by or by arrangement with the body issuing the policy F154 . . .;

then, subject to subsection (2) below, the same results shall follow under sections 268 to 270 as if at the time the sum was lent there had been a surrender of part of the rights conferred by the policy F152 . . . and the sum had been paid as consideration for the surrender (and if the policy is a qualifying policy, whether or not the premiums under it are eligible for relief under section 266, those results shall follow under section 269, whether or not a gain would be treated as arising on the surrender).

(2) Subsection (1) above does not apply—

(a) in relation to a policy if—

(i) it is a qualifying policy; and

(ii) either interest at a commercial rate is payable on the sum lent or the sum is lent to a full-time employee of the body issuing the policy for the purpose of assisting him in the purchase or improvement of a dwelling used or to be used as his only or main residence; F155 . . .

F155 (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F151 Words in s. 271(1)(a) substituted (6.4.2005 with effect in accordance with s. 883(1) of the amending Act) by Income Tax (Trading and Other Income) Act 2005 (c. 5), Sch. 1 para. 123 (with Sch. 2)

F152 Words in s. 271(1) repealed (retrospectively) by Finance Act 1994 (c. 9), Sch. 17 para. 2(1)(a), Sch. 26 Pt. 5(22)

F153 Words in s. 271(1)(b) repealed (retrospectively) by Finance Act 1994 (c. 9), Sch. 17 para. 2(1)(b), Sch. 26 Pt. 5(22)

F154 Words in s. 271(1)(c) repealed (retrospectively) by Finance Act 1994 (c. 9), Sch. 17 para. 2(1)(c), Sch. 26 Pt. 5(22)

F155 S. 271(2)(b) and preceding word repealed (retrospectively) by Finance Act 1994 (c. 9), Sch. 17 para. 2(2), Sch. 26 Pt. 5(22)

Marginal Citations

M20 Source-1975 Sch.2 16(1), (3); 1976 s.35

272 Collection of sums payable under sections 268 and 269. U.K.

M21 (1) Any body by whom a policy to which section 268 or 269 applies has been issued shall, within 30 days of the end of each period of 12 months ending with 31st March in every year, make a return to the collector of the sums which, in that period, have become payable by it under either of those sections.

(2) Any sum which is to be included in a return made under subsection (1) above shall be due at the time by which the return is to be made and shall be paid without being demanded.

(3) Where any sum which was or ought to have been included in such a return is not paid by the end of the period for which the return was to be made, it may be recovered by an assessment as if it were income tax for the year of assessment in which that period ends; and where it appears to the inspector that a sum which ought to have been so included had not been included or that a return is not correct he may make such an assessment to the best of his judgment.

(4) All the provisions of the Income Tax Acts relating to the assessment and collection of tax, interest on unpaid tax, appeals and penalties shall, with the necessary modifications, apply in relation to sums due under this section; and for the purposes of those provisions so far as they relate to interest on unpaid tax, a sum assessed in pursuance of this section shall be treated as having been payable when it would have been payable had it been included in a return under subsection (1) above.

(5) Where, on an appeal against an assessment made in pursuance of this section, it is determined that a greater sum has been assessed than was payable, the excess, if paid, shall be repaid.

(6) Where a body has paid a sum which is payable under section 268 or 269 it shall give within 30 days to the person by whom the sum is, under section 270(4), treated as received a statement specifying that sum and showing how it has been arrived at.

(7) The Board or an inspector may, by notice served on the body by whom a policy to which section 268 or 269 applies has been issued, require the body, within such time, not being less than 30 days, as may be specified in the notice—

(a) to furnish such particulars; or

(b) to make available for inspection by an officer authorised by the Board such books and other documents in the possession or under the control of the body;

as the Board or officer may reasonably require for the purposes of those sections or this section.

Marginal Citations

M21 Source-1975 Sch.1

[F156 273 Payments securing annuities. U.K.

[F157 (1)] [F158 Subject to subsection (2) below, section 274 of this Act and sections 192 to 194 of the Finance Act 2004, if the claimant] is, under any Act of Parliament or under any terms and conditions of employment, liable to the payment of any sum, or to the deduction from any salary or stipend of any sum, for the purpose of securing a deferred annuity to a widow or widower [F159 or surviving civil partner] of the claimant or provision for the claimant’s children after the claimant dies, the claimant shall be entitled to a [F160 tax reduction] equal to income tax at the basic rate on the amount of the sum which he or she has paid or which has been deducted from his or her salary or stipend.

[F161 (2) [F162 There is no entitlement to a tax reduction] under this section in respect of any contribution paid by any person under Part 1 of the Social Security Contributions and Benefits Act 1992 or Part 1 of the Social Security Contributions and Benefits (Northern Ireland) Act 1992.]

[F163 (3) A tax reduction under this section is given effect at Step 6 of the calculation in section 23 of ITA 2007.]]

Textual Amendments

F156 1988(F) s.35and Sch.3 para.10for 1990-91and subsequent years. Previously

“Payments securing widows' and children's annuities.273. Subject to sections 274, 617(3) and 619(6), if the claimant is, under any Act of Parliament or under the terms or conditions of his employment, liable to the payment of any sum, or to the deduction from his salary or stipend of any sum, for the purpose of securing a deferred annuity to his widow or provision for his children after his death, he shall be entitled to a deduction from the amount of income tax with which he is chargeable equal to income tax at the basic rate on the amount of the sum paid by him or deducted from his salary or stipend.”.

F157 S. 273 renumbered as s. 273(1) (6.4.2005 with effect in accordance with s. 883(1) of the amending Act) by Income Tax (Trading and Other Income) Act 2005 (c. 5), Sch. 1 para. 124(a) (with Sch. 2)

F158 Words in s. 273 substituted (6.4.2006) by Finance Act 2004 (c. 12), s. 284(1), Sch. 35 para. 12 (as amended by Income Tax (Trading and Other Income) Act 2005 (c. 5), Sch. 1 para. 655, Sch. 2 para. 161 (with Sch. 2)) (with Sch. 36)

F159 Words in s. 273(1) inserted (5.12.2005) by The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229), regs. 1(1), 59

F160 Words in s. 273(1) substituted (6.4.2007 with effect in accordance with s. 1034(1) of the amending Act) by Income Tax Act 2007 (c. 3), Sch. 1 para. 37(2) (with Sch. 2)

F161 S. 273(2) inserted (6.4.2005 with effect in accordance with s. 883(1) of the amending Act) by Income Tax (Trading and Other Income) Act 2005 (c. 5), Sch. 1 para. 124(d) (with Sch. 2)

F162 Words in s. 273(2) substituted (6.4.2007 with effect in accordance with s. 1034(1) of the amending Act) by Income Tax Act 2007 (c. 3), Sch. 1 para. 37(3) (with Sch. 2)

F163 S. 273(3) inserted (6.4.2007 with effect in accordance with s. 1034(1) of the amending Act) by Income Tax Act 2007 (c. 3), Sch. 1 para. 37(4) (with Sch. 2)

274 Limits on relief under sections 266 and 273. U.K.

(1) M22 The aggregate of the premiums or other sums in respect of which relief is given to any person under section 266 shall not exceed £1,500 in any year of assessment or one-sixth of that person’s total income, whichever is the greater.

(2) M23 The aggregate of the relief given under sections 266 and 273 in respect of premiums or sums payable for securing any benefits other than capital sums on death shall not exceed the amount of the income tax calculated at the appropriate rate on £100.

(3) M24 In subsection (2) above “the appropriate rate”—

(a) in relation to premiums to which section 266 applies, means [F164 12.5 per cent.];

(b) in relation to other payments, means the basic rate of income tax.

(4) M25 War insurance premiums shall not be taken into account in calculating the limits of one-sixth of total income or of £100 mentioned in this section.

In this subsection “war insurance premiums” means any additional premium or other sum paid in order to extend an existing life insurance policy to risks arising from war or war service abroad, and any part of any premium or other sum paid in respect of a life insurance policy covering those risks, or either of them, which [F165 is] attributable to those risks, or either of them.

Textual Amendments

F164 1988(F) s.29—from 6April 1989.Previously

“15 per cent.”.

F165 Word in s. 274(4) substituted (with effect in accordance with s. 134(2) of the amending Act) by Finance Act 1996 (c. 8), Sch. 20 para. 20

Marginal Citations

M22 Source-1970 s.21(1); 1976 Sch.4 21

M23 Source-1970 s.21(3); 1975 Sch.2 6

M24 Source-1970 s.21(4); 1975 Sch.2 6; 1980 s.29; 1976 Sch.4 21; 1987 Sch.15 2(5)

M25 Source-1970 s.21(5)

Supplemental U.K.

F166 275 Meaning of “relative”. U.K.

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

Textual Amendments

F166 S. 275 repealed (1988-89 and subsequent years) by Finance Act 1988 (c. 39), s. 148, Sch. 14 Part IV

276 Effect on relief of charges on income. U.K.

F167 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F167 S. 276 repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by Income Tax Act 2007 (c. 3), Sch. 1 para. 38, Sch. 3 Pt. 1 (with Sch. 2)

277 Partners. U.K.

F168 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F168 S. 277 repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by Income Tax Act 2007 (c. 3), Sch. 1 para. 39, Sch. 3 Pt. 1 (with Sch. 2)

278 Non-residents. U.K.

(1) F169 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(2) [F170 Subject to subsection (2ZA) below, relief under this Chapter shall be given only to an individual] who F171 . . . —

[F172 (za) is not resident in the United Kingdom,

(zb) does not meet the condition in section 56(3) of ITA 2007, and]

(a) is a Commonwealth citizen or [F173 an EEA national];F174 . . .

(b) F174 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(c) F174 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(d) F174 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(e) F174 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F175 (2ZA) Relief under section 266 above (except relief given by virtue of subsection (7) of that section) may also be given to an individual who—

(a) is resident in the United Kingdom, or

(b) meets the condition in section 56(3) of ITA 2007.]

[F176 F177 (2A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .]

(3) No relief under this Chapter shall be given so as to reduce the amount of the income tax payable by the individual below the amount which results from applying the fraction—

to the amount which would have been payable by him by way of income tax if the tax were chargeable on his total income from all sources (including income which is not subject to income tax charged in the United Kingdom) where—

Ais the amount of his income subject to income tax charged in the United Kingdom; and

Bis the amount of his total incomeF178 .

(4) M26 Subsection (3)above shall have effect as if the amount of any relief to which an individual is entitled under section 266(4)were an amount by which his liability to income tax is reducedF176 .

(5) M27 For the purposes of subsection (3)above as it applies to an individual whose income includes income eligible for double taxation relief—

(a) in computing the amount of the income tax payable by the individual, the tax chargeable in respect of the income eligible for double taxation relief shall be disregarded;

(b) in computing the amount of his income subject to income tax charged in the United Kingdom, the income eligible for double taxation relief shall be disregarded; and

(c) in computing his total income from all sources, including income which is not subject to income tax charged in the United Kingdom, income eligible for double taxation relief shall be included, and the income tax which would be chargeable on that total income shall be computed without regard to the double taxation relief available in respect of the income eligible for double taxation relief;

and, accordingly, where this subsection applies, the amount of the tax chargeable in respect of the income eligible for double taxation relief shall not be affected by subsections (2)and (3)aboveF178 .

(6) Subsection (5)shall not operate so as to make the tax payable by an individual for a year of assessment higher than it would have been if the double taxation relief had not been availableF178 .

(7) In subsection (5)above “income eligible for double taxation relief” means any dividends, interest, royalties or other profits which are chargeable to income tax but in respect of which relief (other than credit) is available under an Order in Council under section 788so as to limit the rate of income tax so chargeable (but not so as to confer an exemption and make it income which is not subject to income tax charged in the United Kingdom)F178 .

(8) Any claim which an individual is entitled to make by virtue of subsection (2) above shall be made to the Board.

[F179 (9) In this section “EEA national” means a national of any State, other than the United Kingdom, which is a Contracting Party to the Agreement on the European Economic Area signed at Oporto on 2nd May 1992, as adjusted by the Protocol signed at Brussels on 17th March 1993.]

Textual Amendments

F169 S. 278(1) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by Income Tax Act 2007 (c. 3), Sch. 1 para. 40(2), Sch. 3 Pt. 1 (with Sch. 2)

F170 Words in s. 278(2) substituted (6.4.2007 with effect in accordance with s. 1034(1) of the amending Act) by Income Tax Act 2007 (c. 3), Sch. 1 para. 40(3)(a) (with Sch. 2)

F171 Words in s. 278(2) repealed (with effect in accordance with s. 134(2) of the repealing Act) by Finance Act 1996 (c. 8), Sch. 20 para. 21, Sch. 41 Pt. 5(10), Note

F172 S. 278(2)(za)(zb) inserted (6.4.2007 with effect in accordance with s. 1034(1) of the amending Act) by Income Tax Act 2007 (c. 3), Sch. 1 para. 40(3)(b) (with Sch. 2)

F173 Words in s. 278(2)(a) substituted (with effect in accordance with s. 145(3) of the amending Act) by Finance Act 1996 (c. 8), s. 145(1)

F174 S. 278(2)(b)-(e) and preceding word repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by Income Tax Act 2007 (c. 3), Sch. 1 para. 40(3)(c), Sch. 3 Pt. 1 (with Sch. 2)

F175 S. 278(2ZA) inserted (6.4.2007 with effect in accordance with s. 1034(1) of the amending Act) by Income Tax Act 2007 (c. 3), Sch. 1 para. 40(4) (with Sch. 2)

F176 1988(F) s.31for 1990-91and subsequent years.

F177 S. 278(2A) repealed (with effect in accordance with Sch. 20 Pt. 3(3) Note 2 of the repealing Act) by Finance Act 1999 (c. 16), Sch. 20 Pt. 3(3)

F178 Repealed by 1988(F) ss.31, 148and Sch.14 Part IVfor 1990-91and subsequent years.

F179 S. 278(9) added (with effect in accordance with s. 145(3) of the amending Act) by Finance Act 1996 (c. 8), s. 145(2)

Modifications etc. (not altering text)

C20 See British Nationality Act 1981 ss.37and 51(1)for definition.

Marginal Citations

M26 Source-1976 Sch.4 18(3)

M27 Source-1970 s.27(3)-(5)