PART I THE CHARGE TO TAX

The six Schedules

18 Schedule D.

1

M1The Schedule referred to as Schedule D is as follows:—

  • SCHEDULE D C1

  • C10Tax under this Schedule shall be charged in respect of—

    1. a

      the annual profits or gains arising or accruing—

      1. i

        to any person residing in the United Kingdom from any kind of property whatever, whether situated in the United Kingdom or elsewhere, and

      2. ii

        to any person residing in the United Kingdom from any trade, profession or vocation, whether carried on in the United Kingdom or elsewhere, and

      3. iii

        C2to any person, whether a Commonwealth citizen or not, although not resident in the United Kingdom from any property whatever in the United Kingdom or from any trade, profession or vocation exercised within the United Kingdom, and

    2. b

      all interest of money, annuities and other annual profits or gains F2not charged under Schedule A F9or under ITEPA 2003 as employment income, pension income or social security income, and not specially exempted from tax.

2

M2Tax under Schedule D shall be charged under the Cases set out in subsection (3) below, and subject to and in accordance with the provisions of the Tax Acts applicable to those Cases respectively.

C3C4C5C63

The Cases are—

C7Case I:

tax in respect of any trade carried on in the United Kingdom or elsewhere F1but not contained in Schedule A;

C8Case II:

tax in respect of any profession or vocation not contained in any other Schedule;

C8C11Case III:

tax in respect of—

(a) any interest of money, whether yearly or otherwise, or any annuity or other annual payment, whether such payment is payable within or out of the United Kingdom, either as a charge on any property of the person paying the same by virtue of any deed or will or otherwise, or as a reservation out of it, or as a personal debt or obligation by virtue of any contract, or whether the same is received and payable half-yearly or at any shorter or more distant periods, but not including any payment chargeable under Schedule A, and

(b) all discounts, and

(c) income F3from securities which is payable out of the public revenue of the United Kingdom or Northern Ireland;

C8Case IV:

tax in respect of income arising from securities out of the United Kingdom F4. . . ;

C8C12Case V:

tax in respect of income arising from possessions out of the United Kingdom not being F10employment income, pension income or social security income on which tax is charged under ITEPA 2003;

C9C8Case VI:

tax in respect of any annual profits or gains not falling under any other Case of Schedule D and not charged by virtue of F5Schedule A F11or by virtue of ITEPA 2003 as employment income, pension income or social security income.

F63A

For the purposes of corporation tax subsection (3) above shall have effect as if the following Case were substituted for Cases III and IV, that is to say—

Case III:

tax in respect of—

(a) profits and gains which, as profits and gains arising from loan relationships, are to be treated as chargeable under this Case by virtue of Chapter II of Part IV of the Finance Act 1996;

(b) any annuity or other annual payment which—

(i) is payable (whether inside or outside the United Kingdom and whether annually or at shorter or longer intervals) in respect of anything other than a loan relationship; and

(ii) is not a payment chargeable under Schedule A;

(c) any discount arising otherwise than in respect of a loan relationship;

and as if Case V did not include tax in respect of any income falling within paragraph (a) of the substituted Case III.

F73B

The references in Case IV of Schedule D to income arising from securities out of the United Kingdom, and in Case V of Schedule D to income arising from possessions out of the United Kingdom, shall be taken, in the case of relevant foreign holdings, to include references to the following—

a

any proceeds of such a sale or other realisation of coupons for foreign dividends as is effected by a bank in the United Kingdom which pays the proceeds over or carries them into an account;

b

any proceeds of a sale of such coupons to a dealer in coupons in the United Kingdom by a person who is not a bank or another dealer in coupons.

3C

In this section “relevant foreign holdings” means—

a

any securities issued by or on behalf of a government or a public or local authority in a country outside the United Kingdom; or

b

any shares or securities issued by or on behalf of a body of persons not resident in the United Kingdom;

and “securities” here includes loan stock and similar securities.

3D

In this section “foreign dividends” means—

a

in relation to relevant foreign holdings falling within subsection (3C)(a) above, interest or annual payments payable out of the revenue of the government or authority in question; and

b

in relation to relevant foreign holdings falling within subsection (3C)(b) above, any dividends, interest or annual payments payable in respect of the holdings in question.

3E

In this section—

a

“bank” has the meaning given by section 840A; and

b

references to coupons include, in relation to any foreign dividends, warrants for and bills of exchange purporting to be drawn or made in payment of those dividends.

4

M3The provisions of Schedule D and of subsection (2) above are without prejudice to any other provision of the Tax Acts directing tax to be charged under Schedule D or under one or other of the Cases set out in subsection (3) above, and tax directed to be so charged shall be charged accordingly.

5

F8Parts III and IV contain further provisions relating to the charge to tax under Schedule D.