M1(1)Income tax at the basic rate [F1, the lower rate or the [F2dividend] ordinary rate] shall not be charged by virtue of section 739 in respect of [F3any income to the extent that it has borne tax at that rate] by deduction or otherwise but, subject to that, [F2income to which section 739 applies shall be charged to income tax.]
[F4(1ZA)The charge to income tax under subsection (1) above operates on income falling within subsection (1A) below by treating the income as if it were income to which section 1A applies by virtue of subsection (2)(b) of that section.]
[F5(1A)Income falls within this subsection if it is—
[F6(a)income chargeable under Chapter 3 of Part 4 of ITTOIA 2005 (dividends etc. from UK resident companies etc.);
(b)income chargeable under Chapter 4 of that Part (dividends from non-UK resident companies);
(c)income chargeable under Chapter 5 of that Part (stock dividends from UK resident companies);
(d)income chargeable under Chapter 6 of that Part (release of loan to participator in close company); or
(e)a relevant foreign distribution chargeable under Chapter 8 of Part 5 of that Act (income not otherwise charged).]]
[F7(1B)In subsection (1A) “relevant foreign distribution” means any distribution of a company not resident in the United Kingdom which—
(a)is not chargeable under Chapter 4 of Part 4 of ITTOIA 2005, but
(b)would be chargeable under Chapter 3 of that Part if the company were resident in the United Kingdom.]
(2)In computing the liability to income tax of an individual chargeable by virtue of section 739, the same deductions and reliefs shall be allowed as would have been allowed if the income deemed to be his by virtue of that section had actually been received by him.
(3)An individual who is domiciled outside the United Kingdom shall not be chargeable to tax in respect of any income deemed to be his by virtue of that section if he would not, by reason of his being so domiciled, have been chargeable to tax in respect of it if it had in fact been his income.
(4)Where an individual has been charged to income tax on any income deemed to be his by virtue of section 739 and that income is subsequently received by him, it shall be deemed not to form part of his income again for the purposes of the Income Tax Acts.
(5)In any case where an individual has for the purposes of that section power to enjoy income of a person abroad by reason of his receiving any such benefit as is referred to in section 742(2)(c), then notwithstanding anything in subsection (1) above, the individual shall be chargeable to income tax by virtue of section 739 for the year of assessment in which the benefit is received on the whole of the amount or value of that benefit except in so far as it is shown that the benefit derives directly or indirectly from income on which he has already been charged to tax for that or a previous year of assessment.
Textual Amendments
F1Words in s. 743(1) substituted (with effect in accordance with Sch. 4 para. 20(4) of the amending Act) by Finance (No. 2) Act 1997 (c. 58), Sch. 4 para. 20(2)(a)
F2Words in s. 743(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. 305(2) (with Sch. 2)
F3Words in s. 743(1) substituted (with effect in accordance with Sch. 6 para. 28 of the amending Act) by Finance Act 1996 (c. 8), Sch. 6 para. 20(b)
F4S. 743(1ZA) 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. 305(3) (with Sch. 2)
F5S. 743(1A) inserted (with effect in accordance with Sch. 4 para. 20(4) of the amending Act) by Finance (No. 2) Act 1997 (c. 58), Sch. 4 para. 20(3)
F6S. 743(1A)(a)-(e) substituted for s. 743(1A)(a)-(g) (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. 305(4) (with Sch. 2)
F7S. 743(1B) 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. 305(5) (with Sch. 2)
Modifications etc. (not altering text)
C1 See 1970(M) s.31(3)—appeals to go to Special Commissioners.
Marginal Citations
M1Source—1970 s.480; 1971 Sch.6 72; 1981 s.46(7)