Income and Corporation Taxes Act 1988

[F1 347A General rule. U.K.

(1) A payment to which this section applies shall not be a charge on the income of the person liable to make it, and accordingly—

(a) his income shall be computed without any deduction being made on account of the payment, and

(b) the payment shall not [F2 , for the purposes of corporation tax, ] form part of the income of [F3 any company] to whom it is made or of any [F4 other company].

(2) This section applies to any annual payment made by an individual which would otherwise be within the charge to tax under Case III of Schedule D except—

(a) a payment of interest;

(b) F5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(c) a payment made for bona fide commercial reasons in connection with the individual’s trade, profession or vocation; and

(d) a payment to which section 125(1) applies.

[F6 (2A) This section applies to any annual payment made by an individual which—

(a) arises in the United Kingdom, and

(b) is exempt from any charge under Part 5 of ITTOIA 2005 (miscellaneous income) as a result of section 727 of that Act.]

(3) This section applies to a payment made by personal representatives (within the meaning given in section 701(4)) where—

(a) the deceased would have been liable to make the payment if he had not died, and

(b) this section would have applied to the payment if he had made it.

(4) F7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(5) F7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(6) References in subsection (2) [F8 or (2A)] above to an individual include references to a Scottish partnership in which at least one partner is an individual.

(7) F9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(8) F9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .]

Textual Amendments

F1 Ss. 347A, 347B inserted by Finance Act 1988 (c. 39), s. 36(1)(3)-(5)

F2 Words in s. 347A(1)(b) 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. 146(2)(a) (with Sch. 2)

F3 Words in s. 347A(1)(b) 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. 146(2)(b) (with Sch. 2)

F4 Words in s. 347A(1)(b) 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. 146(2)(c) (with Sch. 2)

F5 S. 347A(2)(b) repealed (with effect in accordance with s. 41(9) of the repealing Act) by Finance Act 2000 (c. 17), s. 41(2), Sch. 40 Pt. 2(1), Note 3

F6 S. 347A(2A) 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. 146(3) (with Sch. 2)

F7 S. 347A(4)(5) repealed (6.4.2005 with effect in accordance with s. 883(1) of the repealing Act) by Income Tax (Trading and Other Income) Act 2005 (c. 5), Sch. 1 para. 146(4), Sch. 3 (with Sch. 2)

F8 Words in s. 347A(6) 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. 146(5) (with Sch. 2)

F9 S. 347A(7)(8) repealed (with effect in accordance with s. 41(9) of the repealing Act) by Finance Act 2000 (c. 17), s. 41(2), Sch. 40 Pt. 2(1), Note 3

Modifications etc. (not altering text)

C1 S. 347A applied (with modifications) by Finance Act 1994 (c. 9), s. 79(1)(2)

C2 S. 347A applied (with effect and application in accordance with s. 74 of the affecting Act) by Finance Act 1995 (c. 4), Sch. 17 para. 4(1)

C3 S. 347A applied (29.4.1996) by Finance Act 1996 (c. 8), 149

C4 S. 347A applied (with effect in accordance with s. 36(8) of the affecting Act) by Finance Act 1999 (c. 16), s. 36(7)