The Scotland Act 2016 (Income Tax Consequential Amendments) Regulations 2017

Amendments to the Finance (No.2) Act 2005

9.—(1) Section 7 of the Finance (No.2) Act 2005(1) (charge to income tax on social security pension lump sum) is amended as follows.

(2) In subsection (5)—

(a) after the words “a charge under this section” insert “for a person who is not a Scottish tax payer in the applicable year of assessment”,

(b) in paragraph (c) omit “or, if P is a Scottish taxpayer, the Scottish basic rate”,

(c) in paragraph (d) omit “or, if P is a Scottish taxpayer, the Scottish higher rate”, and

(d) in paragraph (e) omit “or, if P is a Scottish taxpayer, the Scottish additional rate”.

(3) After subsection (5) insert—

“(5A) Where P is a Scottish taxpayer in the applicable year of assessment, a charge under this section is a charge in respect of the amount of the lump sum at the following rate—

(a) if P’s Step 3 income for the applicable year of assessment is nil, 0%;

(b) if P’s Step 3 income for that year of assessment is greater than nil but does not exceed the Scottish basic rate limit for that year, the Scottish basic rate for that year;

(c) if P’s Step 3 income for that year of assessment exceeds the Scottish basic rate limit for that year, the highest Scottish rate for that tax year that is applicable to P.”.

(1)

2005 c. 22. Section 7 was amended by paragraphs 64 and 65 of Schedule 1 to the Finance Act 2008 (c. 9), paragraph 24 of Schedule 2 to the Finance Act 2009, paragraphs 134 and 135 of Schedule 46 to the Finance Act 2013 (c. 29), paragraph 604 of Schedule 1 to the Income Tax Act 2007 and by S.I. 2015/1810.