Income and Corporation Taxes Act 1988

CHAPTER III U.K. UNIT TRUST SCHEMES, DEALERS IN SECURITIES ETC.

Unit trust schemes U.K.

468 Authorised unit trusts. U.K.

(1) M1 In respect of income arising to the trustees of an authorised unit trust, and for the purposes of the provisions relating to relief for capital expenditure, the Tax Acts shall have effect as if—

(a) the trustees were a company resident in the United Kingdom; and

(b) the rights of the unit holders were shares in the company;

[F1 but paragraph (b) above is without prejudice to the making of distributions which are interest distributions (within the meaning of [F2 regulations made under section 17(3) of the Finance (No. 2) Act 2005 (as at 1st April 2006, see regulation 18(3) of the Authorised Investment Funds (Tax) Regulations 2006 (S.I. 2006/964))]) to unit holders].

[F3 (1A) In relation to any authorised unit trust the rate of corporation tax for the financial year 1996 and subsequent financial years shall be deemed to be the rate at which income tax at the [F4 basic rate] is charged for the year of assessment which begins on 6th April in the financial year concerned [F5 and section 13 shall not apply].]

(2) F6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3) References in the Corporation Tax Acts to a body corporate shall be construed in accordance with [F7 subsection (1) above], and section [F8 234A] shall apply with any necessary modifications.

(4) F9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(5) F10 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(6) [F11 Subject to subsections (7) to (9) below] in this section—

• “authorised unit trust” means, as respects an accounting period, a unit trust scheme in the case of which an order under section [F12 243 of the Financial Services and Markets Act 2000] is in force during the whole or part of that accounting period;

• F13 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• “unit holder” means a person entitled to a share of the investments subject to the trusts of a unit trust scheme; F14 . . .

• F14 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F15 (7) Each of the parts of an umbrella scheme shall be regarded for the purposes of this Chapter as an authorised unit trust and the scheme as a whole shall not be so regarded.

(8) In this section, “umbrella scheme” means a unit trust scheme—

(a) which provides arrangements for separate pooling of the contributions of the participants and the profits or income out of which payments are to be made to them;

(b) under which the participants are entitled to exchange rights in one pool for rights in another; and

(c) in the case of which an order under section [F12 243 of the Financial Services and Markets Act 2000] is in force;

and any reference to a part of an umbrella scheme is a reference to such of the arrangements as relate to a separate pool.

(9) In relation to a part of an umbrella scheme, any reference—

(a) to investments subject to the trusts of an authorised unit trust, shall have effect as a reference to such of the investments as under the arrangements form part of the separate pool to which the part of the umbrella scheme relates; and

(b) to a unit holder, shall have effect as a reference to a person for the time being having rights in that separate pool.]

Textual Amendments

F1 Words in s. 468(1) inserted (with effect in accordance with Sch. 14 para. 7 of the amending Act) by Finance Act 1994 (c. 9), Sch. 14 para. 3(2)

F2 Words in s. 468(1) substituted (1.4.2006 with effect in accordance with reg. 1(2) of the amending S.I.) by The Authorised Investment Funds (Tax) Regulations 2006 (S.I. 2006/964), regs. 1(1), 88(2)

F3 S. 468(1A) inserted (with effect in accordance with Sch. 6 paras. 10(2), 28 of the amending Act) by Finance Act 1996 (c. 8), Sch. 6 para. 10(1)

F4 Words in s. 468(1A) substituted (with effect in accordance with Sch. 1 para. 65 of the amending Act) by Finance Act 2008 (c. 9), Sch. 1 para. 41

F5 Words in s. 468(1A) substituted (with effect in accordance with s. 26(8)-(11) of the amending Act) by Finance Act 2006 (c. 25), s. 26(4)

F6 S. 468(2) repealed (with effect in accordance with Sch. 14 para. 7 of the repealing Act) by Finance Act 1994 (c. 9), Sch. 14 para. 3(3), Sch. 25 Pt. 5(13), Note

F7 Words in s. 468(3) substituted (with effect in accordance with Sch. 14 para. 7 of the amending Act) by Finance Act 1994 (c. 9), Sch. 14 para. 3(4)

F8 Words in s. 468(3) substituted (16.7.1992) by Finance (No. 2) Act 1992 (c. 48), s. 32(3)(4)

F9 S. 468(4) repealed (28.9.2004 with effect in accordance with art. 1(2) of the repealing S.I.) by The Finance Act 2004, Sections 38 to 40 and 45 and Schedule 6 (Consequential Amendment of Enactments) Order 2004 (S.I. 2004/2310), art. 2, Sch. para. 20

F10 S. 468(5) repealed by Finance Act 1990 (c. 29), s. 52, Sch. 19 Pt. 4, Note 7

F11 Words in s. 468(6) inserted (with effect in accordance with s. 113(4)-(11) of the amending Act) by Finance Act 1994 (c. 9), s. 113(1)

F12 Words in s. 468(6)(8) substituted (1.12.2001) by Financial Services and Markets Act 2000 (c. 8), s. 431(2), Sch. 20 para. 4(3); S.I. 2001/3538, art. 2(1)

F13 S. 468(6): definition of "distribution period" repealed (with effect in accordance with Sch. 14 para. 7 of the repealing Act) by Finance Act 1994 (c. 9), Sch. 14 para. 3(5), Sch. 26 Pt. 5(13), Note

F14 S. 468(6): definition of "unit trust scheme" 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. 85(3), Sch. 3 Pt. 1 (with Sch. 2)

F15 S. 468(7)-(9) added (with effect in accordance with s. 113(4)-(11) of the amending Act) by Finance Act 1994 (c. 9), s. 113(2)

Modifications etc. (not altering text)

C1 S. 468 modified (28.4.1997) by The Open-ended Investment Companies (Tax) Regulations 1997 (S.I 1997/1154), regs. 1, 9, 10 (as amended (1.12.2001) by The Financial Services and Markets Act 2000 (Consequential Amendments) (Taxes) Order 2001 (S.I. 2001/3629), art. 166)

C2 S. 468(1A) excluded by The Authorised Investment Funds (Tax) Regulations 2006 (S.I. 2006/964), reg. 14B (as inserted (1.1.2009 with effect in accordance with reg. 1(2) of the amending S.I.) by The Authorised Investment Funds (Tax) (Amendment No. 3) Regulations 2008 (S.I. 2008/3159), regs. 1(1), 11)

C3 Definition employed for the purposes of s.46(7)—insurance companies: annual deemed disposal of holdings of unit trusts etc.

Marginal Citations

M1 Source—1970 ss.354, 358; 1980 s.60; 1987 s.38, 40(1); 1987 (No.2) s.40(1)

[F16 468AA Authorised unit trusts: futures and options. U.K.

F17 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .]

Textual Amendments

F16 S. 468AA inserted by Finance Act 1990 (c. 29), s. 81(1)(5)

F17 S. 468AA repealed (with effect in accordance with s. 83(3) of the repealing Act) by Finance Act 2002 (c. 23), Sch. 27 para. 6, Sch. 40 Pt. 3(13), Note (with Sch. 28)

[F18 468A Certified unit trusts. U.K.

F19 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .]

Textual Amendments

F18 Ss. 468A-468C inserted by Finance Act 1989 (c. 26), s. 78

F19 Ss. 468A-468D repealed by Finance Act 1990 (c. 29), s. 52, Sch. 19 Pt. 4, Note 7

[F20 468A Open-ended investment companies U.K.

(1) In relation to an open-ended investment company the rate of corporation tax for the financial year 2005 and subsequent financial years shall be deemed to be the rate at which income tax at the [F21 basic rate] is charged for the year of assessment which begins on 6th April in the financial year concerned [F22 (and section 13 shall not apply)].

(2) In this section “open-ended investment company” means a company incorporated in the United Kingdom to which section 236 of the Financial Services and Markets Act 2000 applies.

(3) Each of the parts of an umbrella company shall be regarded for the purposes of this section as an open-ended investment company and the umbrella company as a whole shall not be so regarded (and shall not, unless an enactment expressly provides otherwise, be regarded as a company for any other purpose of the Tax Acts).

(4) In subsection (3) “umbrella company” means an open-ended investment company—

(a) in respect of which the instrument of incorporation provides arrangements for separate pooling of the contributions of the shareholders and the profits or income out of which payments are to be made to them, and

(b) the shareholders of which are entitled to exchange rights in one pool for rights in another,

and a reference to part of an umbrella company is a reference to a separate pool.]

Textual Amendments

F20 S. 468A inserted (20.7.2005) by Finance (No. 2) Act 2005 (c. 22), s. 16

F21 Words in s. 468A(1) substituted (with effect in accordance with Sch. 1 para. 65 of the amending Act) by Finance Act 2008 (c. 9), Sch. 1 para. 42

F22 Words in s. 468A(1) substituted (with effect in accordance with s. 26(8)-(11) of the amending Act) by Finance Act 2006 (c. 25), s. 26(5)

Modifications etc. (not altering text)

C4 S. 468A(2)(3)(4) applied (1.4.2009 with effect in accordance with s. 1329(1) of the affecting Act) by Corporation Tax Act 2009 (c. 4), s. 488 (with Sch. 2 Pts. 1, 2)

F23 468B Certified unit trusts: corporation tax. U.K.

F24 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F23 Ss. 468A-468C inserted by Finance Act 1989 (c. 26), s. 78

F24 Ss. 468A-468D repealed by Finance Act 1990 (c. 29), s. 52, Sch. 19 Pt. 4, Note 7

F25 468C Certified unit trusts: distributions. U.K.

F26 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F25 Ss. 468A-468C inserted by Finance Act 1989 (c. 26), s. 78

F26 Ss. 468A-468D repealed by Finance Act 1990 (c. 29), s. 52, Sch. 19 Pt. 4, Note 7

[F27 468D Funds of funds: distributions. U.K.

F28 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .]

Textual Amendments

F27 S. 468D inserted by Finance Act 1989 (c. 26), s. 79

F28 Ss. 468A-468D repealed by Finance Act 1990 (c. 29), s. 52, Sch. 19 Pt. 4, Note 7

[F29 468E Authorised unit trusts: corporation tax. U.K.

F30 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .]

Textual Amendments

F29 Ss. 468E-468G inserted by Finance Act 1990 (c. 29), s. 51

F30 S. 468E repealed (with effect in accordance with Sch. 6 paras. 10(3), 28 of the repealing Act) by Finance Act 1996 (c. 8), Sch. 41 Pt. 5(1), Note 1

[F31 468EE Corporation tax: cases where lower rate applies. U.K.

F32 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .]

Textual Amendments

F31 S. 468EE inserted (3.5.1994) by Finance Act 1994 (c. 9), s. 111(2)

F32 S. 468EE repealed (with effect in accordance with Sch. 6 paras. 10(3), 28 of the repealing Act) by Finance Act 1996 (c. 8), Sch. 41 Pt. 5(1), Note 1

F33 468F Authorised unit trusts: distributions. U.K.

F34 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F33 Ss. 468E-468G inserted by Finance Act 1990 (c. 29), s. 51

F34 S. 468F repealed (with effect in accordance with Sch. 14 para. 7 of the repealing Act) by Finance Act 1994 (c. 9), Sch. 14 para. 4, Sch. 26 Pt. 5(13), Note

F35 468G Dividends paid to investment trusts. U.K.

F36 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F35 Ss. 468E-468G inserted by Finance Act 1990 (c. 29), s. 51

F36 S. 468G repealed (with effect in accordance with Sch. 14 para. 7 of the repealing Act) by Finance Act 1994 (c. 9), Sch. 14 para. 4, Sch. 26 Pt. 5(13), Note

[F37 Distributions of authorised unit trusts: general U.K.

Textual Amendments

F37 Ss. 468H-468R and cross-headings inserted (with effect in accordance with Sch. 14 para. 7 of the amending Act) by Finance Act 1994 (c. 9), Sch. 14 para. 2

468H Interpretation. U.K.

F38 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F38 Ss. 468H-468Q repealed (in force in accordance with S.I. 2006/982, art. 2) by Finance (No. 2) Act 2005 (c. 22), ss. 17(1)(a), 19(1), Sch. 11 Pt. 2(3), Note 2

468I Distribution accounts. U.K.

F39 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F39 Ss. 468H-468Q repealed (in force in accordance with S.I. 2006/982, art. 2) by Finance (No. 2) Act 2005 (c. 22), ss. 17(1)(a), 19(1), Sch. 11 Pt. 2(3), Note 2

Dividend and foreign income distributions U.K.

468J Dividend distributions. U.K.

F40 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F40 Ss. 468H-468Q repealed (in force in accordance with S.I. 2006/982, art. 2) by Finance (No. 2) Act 2005 (c. 22), ss. 17(1)(a), 19(1), Sch. 11 Pt. 2(3), Note 2

468K Foreign income distributions. U.K.

F41 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F41 S. 468K repealed (with effect in accordance with s. 36, Sch. 6 para. 8(9) of the repealing Act) by Finance (No. 2) Act 1997 (c. 58), Sch. 6 para. 8(4), Sch. 8 Pt. 2(11)

Interest distributions U.K.

468L Interest distributions. U.K.

F42 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F42 Ss. 468H-468Q repealed (in force in accordance with S.I. 2006/982, art. 2) by Finance (No. 2) Act 2005 (c. 22), ss. 17(1)(a), 19(1), Sch. 11 Pt. 2(3), Note 2

[F43 468M Cases where no obligation to deduct tax U.K.

F44 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .]

Textual Amendments

F43 S. 468M substituted for ss. 468M, 468N (with effect in accordance with s. 203(14) of the amending Act) by Finance Act 2003 (c. 14), s. 203(3)

F44 Ss. 468H-468Q repealed (in force in accordance with S.I. 2006/982, art. 2) by Finance (No. 2) Act 2005 (c. 22), ss. 17(1)(a), 19(1), Sch. 11 Pt. 2(3), Note 2

468N. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

468O Residence condition [F45 and reputable intermediary condition]. U.K.

F46 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F45 Words in s. 468O sidenote inserted (with effect in accordance with s. 203(14) of the amending Act) by Finance Act 2003 (c. 14), s. 203(7)

F46 Ss. 468H-468Q repealed (in force in accordance with S.I. 2006/982, art. 2) by Finance (No. 2) Act 2005 (c. 22), ss. 17(1)(a), 19(1), Sch. 11 Pt. 2(3), Note 2

468P Residence declarations. U.K.

F47 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F47 Ss. 468H-468Q repealed (in force in accordance with S.I. 2006/982, art. 2) by Finance (No. 2) Act 2005 (c. 22), ss. 17(1)(a), 19(1), Sch. 11 Pt. 2(3), Note 2

[F48 468PA Section 468O(1A): consequences of reasonable but incorrect belief U.K.

F49 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F48 Ss. 468PA, 468PB inserted (with effect in accordance with s. 203(14) of the amending Act) by Finance Act 2003 (c. 14), s. 203(9)

F49 Ss. 468H-468Q repealed (in force in accordance with S.I. 2006/982, art. 2) by Finance (No. 2) Act 2005 (c. 22), ss. 17(1)(a), 19(1), Sch. 11 Pt. 2(3), Note 2

468PB Regulations supplementing sections 468M to 468PA U.K.

F50 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .]

Textual Amendments

F48 Ss. 468PA, 468PB inserted (with effect in accordance with s. 203(14) of the amending Act) by Finance Act 2003 (c. 14), s. 203(9)

F50 Ss. 468H-468Q repealed (in force in accordance with S.I. 2006/982, art. 2) by Finance (No. 2) Act 2005 (c. 22), ss. 17(1)(a), 19(1), Sch. 11 Pt. 2(3), Note 2

Distributions to corporate unit holder U.K.

468Q Dividend distribution to corporate unit holder. U.K.

F51 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F51 Ss. 468H-468Q repealed (in force in accordance with S.I. 2006/982, art. 2) by Finance (No. 2) Act 2005 (c. 22), ss. 17(1)(a), 19(1), Sch. 11 Pt. 2(3), Note 2

468R Foreign income distribution to corporate unit holder. U.K.

F52 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F52 S. 468R repealed (with effect in accordance with s. 36, Sch. 6 para. 8(9) of the repealing Act) by Finance (No. 2) Act 1997 (c. 58), Sch. 6 para. 8(7), Sch. 8 Pt. 2(11), Note

469 Other unit trusts. U.K.

(1) This section applies to—

(a) M2 any unit trust scheme [F53 that is [F54 an unauthorised unit trust within the meaning of section 989 of ITA 2007]]; F55 . . .

(b) F55 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

except where the trustees of the scheme are not resident in the United Kingdom.

(2) Income arising to the trustees of the scheme shall be regarded for the purposes of the [F56 Corporation Tax Acts] as income of the trustees (and not as income of the unit holders) [F57 ; and the trustees (and not the unit holders) shall be regarded as the persons to or on whom allowances or charges are to be made under the provisions of those Acts relating to relief for capital expenditure]F58 . . . .

[F59 (2A) F60 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F61 (2B) F60 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .]]

(3) F60 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4) F60 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F62 (4A) For the purposes of the Corporation Tax Acts, the trustees are treated as making an annual payment (under deduction of income tax) to each unit holder if an amount is shown in the scheme's accounts as income available for payment to unit holders or for investment.

(4B) The amount of an annual payment to a unit holder for a distribution period before the deduction of income tax is its gross amount.

(4C) Section 548(2) of ITTOIA 2005 applies for the purpose of calculating the gross amount of an annual payment for a distribution period as it applies for the purpose of calculating the gross amount of income treated as received for a distribution period under Chapter 10 of Part 4 of that Act.

(4D) Section 941 of ITA 2007 deals with the deduction of income tax from the gross amount so calculated.]

(5) The date on which the annual [F63 payment is] treated as made shall be the date or latest date provided by the terms of the scheme for any distribution in respect of the distribution period in question, except that, if—

(a) the date so provided is more than 12 months after the end of the period; or

(b) no date is so provided,

the date on which the [F63 payment is] treated as made shall be the last day of the period.

[F64 (5A) F65 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(5B) F65 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(5C) F65 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(5D) F65 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .]

(6) In this section “distribution period”[F66 means a period beginning on or after 1st April 1987 over which income from the investments subject to the trusts is aggregated for the purposes of ascertaining the amount available for distribution to unit holders, but]—

(a) if the scheme does not make provision for distribution periods, then for the purposes of this section its distribution periods shall be taken to be successive periods of 12 months the first of which began with the day on which the scheme took effect; and

(b) if the scheme makes provision for distribution periods of more than 12 months, then for the purposes of this section each of those periods shall be taken to be divided into two (or more) distribution periods, the second succeeding the first after 12 months (and so on for any further periods).

[F67 (6A) F68 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .]

(7) F65 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(8) F65 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(9) F65 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(10) F65 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(11) This section shall have effect in relation to distribution periods beginning on or after 6th April 1987.

Textual Amendments

F53 Words in s. 469(1)(a) substituted (with effect in accordance with s. 113(4)-(11) of the amending Act) by Finance Act 1994 (c. 9), s. 113(3)(a)

F54 Words in s. 469(1) substituted (3.2.2009 with effect in accordance with art. 1(2) of the amending S.I.) by The Income Tax Act 2007 (Amendment) Order 2009 (S.I. 2009/23), arts. 1(1), 2(2)

F55 S. 469(1)(b) and preceding word repealed (with effect in accordance with Sch. 41 Pt. 5(1) Note 2 of the repealing Act) by Finance Act 1996 (c. 8), Sch. 41 Pt. 5(1)

F56 Words in s. 469(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. 87(2)(a) (with Sch. 2)

F57 Words in s. 469(2) inserted (3.2.2009 with effect in accordance with art. 1(2) of the amending S.I.) by The Income Tax Act 2007 (Amendment) Order 2009 (S.I. 2009/23), arts. 1(1), 2(3)

F58 Words in s. 469(2) 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. 87(2)(b), Sch. 3 Pt. 1 (with Sch. 2)

F59 S. 469(2A)(2B) inserted (with effect in accordance with Sch. 4 para. 12(5) of the amending Act) by Finance (No. 2) Act 1997 (c. 58), Sch. 4 para. 12(3)

F60 S. 469(2A)-(4) 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. 87(3), Sch. 3 Pt. 1 (with Sch. 2)

F61 S. 469(2B) 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. 181(3) (with Sch. 2)

F62 S. 469(4A)-(4D) 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. 87(4) (with Sch. 2)

F63 Words in s. 469(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. 87(5) (with Sch. 2)

F64 S. 469(5A)-(5D) inserted by Finance Act 1988 (c. 39), s. 71

F65 S. 469(5A)-(5D)(7)-(10) 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. 87(6), Sch. 3 Pt. 1 (with Sch. 2)

F66 Words in s. 469(6) substituted (with effect in accordance with Sch. 14 para. 7 of the amending Act) by Finance Act 1994 (c. 9), Sch. 14 para. 5

F67 S. 469(6A) inserted (with effect in accordance with s. s. 113(4)-(11) of the amending Act) by Finance Act 1994 (c. 9), s. 113(3)(b)

F68 S. 469(6A) omitted (3.2.2009 with effect in accordance with art. 1(2) of the repealing S.I.) by virtue of The Income Tax Act 2007 (Amendment) Order 2009 (S.I. 2009/23), arts. 1(1), 2(4)

Modifications etc. (not altering text)

C5 S. 469 extended (27.7.1993) by 1993 c. 37, s. 12, Sch. 2 Pt. I para. 22(1)(2)

Marginal Citations

M2 Source—1970 s.354A; 1987 s.39; 1987 (No.2) s.40(1)

[F69 469A Court common investment funds. U.K.

(1) The Tax Acts shall have effect in relation to any common investment fund established under section 42 of the M3 Administration of Justice Act 1982 (common investment funds for money paid into court) as if—

(a) the fund were an authorised unit trust;

(b) the person who is for the time being the investment manager of the fund were the trustee of that authorised unit trust; and

(c) [F70 the persons with qualifying interests] were the unit holders in that authorised unit trust.

[F71 (1A) For the purposes of subsection (1)(c) above, the persons with qualifying interests are—

(a) in relation to shares in the fund held by the Accountant General, the persons whose interests entitle them, as against him, to share in the fund’s investments;

(b) in relation to shares in the fund held by any other person authorised by the Lord Chancellor to hold such shares on behalf of others (an “authorised person”)—

(i) if there are persons whose interests entitle them, as against the authorised person, to share in the fund’s investments, those persons;

(ii) if not, the authorised person;

(c) in relation to shares in the fund held by persons authorised by the Lord Chancellor to hold such shares on their own behalf, those persons.]

(2) In this section “the Accountant General” means F72 . . . the Accountant General of the Supreme Court of Judicature in England and Wales or the Accountant General of the Supreme Court of Judicature of Northern Ireland.

(3) F73 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .]

Textual Amendments

F69 S. 469A inserted (with effect in accordance with s. 68(3)-(5) of the amending Act) by Finance Act 1999 (c. 16), s. 68(1)

F70 Words in s. 469A(1)(c) substituted (with effect in accordance with s. 183(4) of the amending Act) by Finance Act 2003 (c. 14), s. 183(2)

F71 S. 469A(1A) inserted (with effect in accordance with s. 183(4) of the amending Act) by Finance Act 2003 (c. 14), s. 183(3)

F72 Words in s. 469A(2) repealed (with effect in accordance with Sch. 43 Pt. 3(17) Note of the repealing Act) by Finance Act 2003 (c. 14), Sch. 43 Pt. 3(17)

F73 S. 469A(3) repealed (with effect in accordance with Sch. 43 Pt. 3(17) Note of the repealing Act) by Finance Act 2003 (c. 14), Sch. 43 Pt. 3(17)

Marginal Citations

M3 1982 c.53.

470 Transitional provisions relating to unit trusts. U.K.

(1) F74 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F75 (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3) F74 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F74 S. 470(1)(3) repealed (31.7.1998) by Finance Act 1998 (c. 36), Sch. 27 Pt. 3(23)

F75 S. 470(2) ceased to have effect (29.4.1988) by virtue of s. 470(3) below and S.I. 1988/745, art. 2

Dealers in securities, banks and insurance businesses U.K.

471 Exchange of securities in connection with conversion operations, nationalisation etc. U.K.

F76 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F76 S. 471 repealed (with effect in accordance with s. 101(3) of the repealing Act) by Finance Act 1998 (c. 36), s. 101(1), Sch. 27 Pt. 3(23), Note 1

472 Distribution of securities issued in connection with nationalisation etc. U.K.

F77 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F77 S. 472 repealed (with effect in accordance with s. 101(4) of the repealing Act) by Finance Act 1998 (c. 36), s. 101(2), Sch. 27 Pt. 3(23), Note 2

[F78 472A Trading profits etc. from securities: taxation of amounts taken to reserves U.K.

(1) This section applies in relation to securities—

(a) which are held by a [F79 company] carrying on a banking business, an insurance business or a business consisting wholly or partly in dealing in securities; and

(b) which are such that a profit on their sale would form part of the trading profits of that business.

(2) Profits and losses arising from such securities that in accordance with generally accepted accounting practice are—

(a) calculated by reference to the fair value of the securities, and

(b) recognised in that [F80 company's] statement of recognised gains and losses or statement of changes in equity,

shall be brought into account in computing the profits or losses of a business in accordance with the provisions of this Act applicable to Case I of Schedule D.

(3) Subsection (2) does not apply—

(a) to an amount to the extent that it derives from or otherwise relates to an amount brought into account under that subsection in an earlier period of account, or

(b) to an amount recognised for accounting purposes by way of correction of a fundamental error.

(4) In this section, “securities”—

(a) includes shares and any rights, interests or options that by virtue of section 99, 135(5) or 136(5) of the Taxation of Chargeable Gains Act 1992 are treated as shares for the purposes of sections 126 to 136 of that Act; but

(b) does not include a loan relationship (within the meaning of Chapter 2 of Part 4 of the Finance Act 1996).]

Textual Amendments

F78 S. 472A inserted (with effect in accordance with s. 54(2) of the amending Act) by Finance Act 2004 (c. 12), s. 54 (as amended (retrospectively) by Finance Act 2005 (c.7), Sch. 4 para. 50, Sch. 11 Pt. 2(7))

F79 Word in s. 472A(1) 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. 182(a) (with Sch. 2)

F80 Word in s. 472A(2) 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. 182(b) (with Sch. 2)

473 Conversion etc. of securities held as circulating capital. U.K.

(1) M4 Subsections (3) and (4) below shall have effect where a transaction to which this section applies occurs in relation to any securities (“the original holding”)—

(a) to which a [F81 company] carrying on a banking business, an insurance business or a business consisting wholly or partly in dealing in securities is beneficially entitled; and

(b) which are such that a profit on their sale would form part of the trading profits of that business.

(2) This section applies to any transaction which F82 . . . —

(a) [F83 results] in the original holding being equated with a new holding by virtue of sections [F84 126 to 136 of the 1992] Act (capital gains tax roll-over relief in cases of conversion etc.); or

(b) [F85 is] treated by virtue of section [F84 134] of that Act (compensation stock) as an exchange for a new holding which does not involve a disposal of the original holding;

F86 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F87 (2A) This section does not apply to securities in respect of which unrealised profits or losses, calculated by reference to the fair value of the securities at the end of a period of account, are taken into account in the period of account in which the transaction mentioned in subsection (2) above occurs.

(2B) Subsection (2A) above shall be disregarded in determining for the purposes of section 66 of the Finance Act 2002 (election to continue postponement of mark to market) whether an asset was held by a person on 1st January 2002.]

(3) Subject to subsection (4) below, in making any computation in accordance with the provisions of this Act applicable to Case I of Schedule D of the profits or losses of the business—

(a) the transaction shall be treated as not involving any disposal of the original holding, and

(b) the new holding shall be treated as the same asset as the original holding.

(4) Where under the transaction the [F81 company] concerned receives or becomes entitled to receive any consideration in addition to the new holding, subsection (3) above shall have effect as if references to the original holding were references to the proportion of it which the market value of the new holding at the time of the transaction bears to the aggregate of that value and the market value at that time (or, if it is cash, the amount) of the consideration.

(5) F88 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(6) In this section “securities” includes shares, any security within the meaning of section [F89 132 of the 1992 Act] and any rights, interests or options which by virtue of section [F89 [F90 135(5), 136(5)], 147 or 99] of that Act are treated as shares for the purposes of sections [F89 126 to 136] of that Act.

(7) In determining for the purposes of subsection (2)(a) above whether a transaction [F83 results] in the original holding being equated with a new holding by virtue of section [F91 135 or 136 of the 1992] Act the reference in section [F91 137(1)] of that Act to capital gains tax shall be construed as a reference to income tax.

Textual Amendments

F81 Words in s. 473(1)(4) 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. 183 (with Sch. 2)

F82 Words in s. 473(2) repealed (with effect in accordance with s. 67(4)(a) of the repealing Act) by Finance Act 2002 (c. 23), s. 67(1)(a), Sch. 40 Pt. 3(8), Note

F83 Words in s. 473(2)(a)(7) substituted (with effect in accordance with s. 67(4)(a) of the amending Act) by Finance Act 2002 (c. 23), s. 67(1)(b)

F84 Words in 473(2)(5) substituted (6.3.1992 with effect as mentioned in s. 289(1)(2) of the amending Act) by Taxation of Chargeable Gains Act 1992 (c. 12), ss. 289, 290(1), Sch. 10 para. 14(27)(a) (with ss. 60, 101(1), 171, 201(3))

F85 Word in s. 473(2)(b) substituted (with effect in accordance with s. 67(4)(a) of the amending Act) by Finance Act 2002 (c. 23), s. 67(1)(c)

F86 Words in s. 473(2) repealed (with effect in accordance with s. 101(3) of the repealing Act) by Finance Act 1998 (c. 36), Sch. 27 Pt. 3(23), Note 1

F87 S. 473(2A)(2B) inserted (with effect in accordance with s. 67(4)(a) of the amending Act) by Finance Act 2002 (c. 23), s. 67(2)

F88 S. 473(5) repealed (with effect in accordance with s. 164(5) of the repealing Act) by Finance Act 1996 (c. 8), Sch. 41 Pt. 5(24), Note

F89 Words in s. 473(6) substituted (6.3.1992 with effect as mentioned in s. 289(1)(2) of the amending Act) by Taxation of Chargeable Gains Act 1992 (c. 12), ss. 289, 290(1), Sch. 10 para. 14(27)(b) (with ss. 60, 101(1), 171, 201(3))

F90 Words in s. 473(6) substituted (with effect in accordance with Sch. 9 para. 8(2) of the amending Act) by Finance Act 2002 (c. 23), Sch. 9 para. 4(4)

F91 Words in s. 473(7) substituted (6.3.1992 with effect as mentioned in s. 289(1)(2) of the amending Act) by Taxation of Chargeable Gains Act 1992 (c. 12), ss. 289, 290(1), Sch. 10 para. 14(27)(c) (with ss. 60, 101(1), 171, 201(3))

Marginal Citations

M4 Source—1977 s.46; 1979(C) Sch.7

474 Treatment of tax-free income. U.K.

(1) F92 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(2) F93 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F94 (3) F92 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .]]

Textual Amendments

F92 S. 474(1)(3) repealed (with effect in accordance with Sch. 7 para. 32-35, Sch. 41 Pt. 5(2) Note of the repealing Act) by Finance Act 1996 (c. 8). Sch. 7 para. 18, Sch. 41 Pt. 5(2)

F93 S. 474(2) repealed (with effect in accordance with s. 154(9) of the repealing Act) by Finance Act 1996 (c. 8), Sch. 28 para. 2, Sch. 41 Pt. 5(18), Note

F94 S. 474(3) inserted (with effect in accordance with Sch. 8 para. 55 of the amending Act) by Finance Act 1995 (c. 4), Sch. 8 para. 25(2)

475 Tax-free Treasury securities: exclusion of interest on borrowed money. U.K.

[F95 (1) This section has effect where a banking business, an insurance business or a business consisting wholly or partly in dealing in securities—

(a) is carried on in the United Kingdom by a person not ordinarily resident there; and

(b) in computing for any of the purposes of the Tax Acts the profits arising from, or loss sustained, in the business, any amount which would otherwise be brought into account is disregarded by virtue of a condition subject to which any 3½% War Loan 1952 or after was issued;

and for this purpose insurance business includes insurance business of any category.]

(2) Up to the amount determined under this section (“the amount ineligible for relief”), interest on money borrowed for the purposes of the business—

(a) shall be excluded in any computation under the Tax Acts of the profits (or losses) arising from the business F96 . . . , and

[F97 (b) shall not be brought into account by way of any debit given for the purposes of Chapter II of Part IV of the Finance Act 1996 (loan relationships).]

(3) Subject to subsection (4) below, in determining the amount ineligible for relief, account shall be taken of all money borrowed for the purposes of the business which is outstanding in the accounting or basis period, up to the total cost of the [F98 3½% War Loan 1952 or after] held for the purpose of the business in that period.

(4) Where the person carrying on the business is a company, account shall not be taken of any borrowed money carrying interest which, apart from subsection (2) above, does not fall to be included in the computations under paragraph (a) of that subsection [F99 or to be brought into account by way of a debit given for the purposes of Chapter II of Part IV of the Finance Act 1996 (loan relationships).]

(5) F100 . . . The amount ineligible for relief shall be equal to a year’s interest on the amount of money borrowed which is to be taken into account under subsection (3) above at a rate equal to the average rate of interest in the accounting or basis period on money borrowed for the purposes of the business, except that in the case of a period of less than 12 months interest shall be taken for that shorter period instead of for a year.

(6) F101 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(7) F101 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(8) For the purposes of this section the cost of a holding of [F98 3½% War Loan 1952 or after] which has fluctuated in the accounting or basis period shall be the average cost of acquisition of the initial holding, and of any subsequent acquisitions in the accounting or basis period, applied to the average amount of the holding in the accounting or basis period, F102 . . . .

(9) In this section “accounting or basis period” means the company’s accounting period or the period by reference to which the profits or gains arising in the year of assessment are to be computed.

Textual Amendments

F95 S. 475(1) substituted (with effect in accordance with s. 154(9) of the amending Act) by Finance Act 1996 (c. 8), Sch. 28 para. 3(1)

F96 Words in s. 475(2)(a) repealed (with effect in accordance with Sch. 8 para. 55 of the repealing Act) by Finance Act 1995 (c. 4), Sch. 8 para. 25(1)(b), Sch. 29 Pt. 8(5), Note 1

F97 S. 475(2)(b) substituted (with effect in accordance with s. 105(1) of the amending Act) by Finance Act 1996 (c. 8), Sch. 14 para. 27(1) (with Sch. 15)

F98 Words in s. 475(3)(8) substituted (with effect in accordance with s. 154(9) of the amending Act) by Finance Act 1996 (c. 8), Sch. 28 para. 3(2)

F99 Words in s. 475(4) substituted (with effect in accordance with s. 105(1) of the amending Act) by Finance Act 1996 (c. 8), Sch. 14 para. 27(2) (with Sch. 15)

F100 Words in s. 475(5) repealed (with effect in accordance with s. 154(9) of the repealing Act) by Finance Act 1996 (c. 8), Sch. 41 Pt. 5(18), Note

F101 S. 475(6)(7) repealed (with effect in accordance with s. 154(9) of the repealing Act) by Finance Act 1996 (c. 8), Sch. 41 Pt. 5(18), Note

F102 Words in s. 475(8) repealed (with effect in accordance with s. 154(9) of the repealing Act) by Finance Act 1996 (c. 8), Sch. 41 Pt. 5(18), Note