SCHEDULES
SCHEDULE 6 Taxation of savings at the lower rate
The Taxes Management Act 1970 (c. 9)
F101
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The Taxes Act 1988
F102
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F103
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F14
1
Subject to sub-paragraph (2) below, in subsection (1)(b) of section 51B of that Act (periodic returns of tax on gilts), for “basic rate” there shall be substituted “
lower rate
”
.
2
Sub-paragraph (1) above has effect for the purposes only of the exercise on or after the day on which this Act is passed of the Treasury’s power to make regulations under that section; but that power may be exercised on or after that day for the purpose of making provision, with retrospective effect, on the basis that the assumption to be applied in relation to all payments made on or after 6th April 1996 was an assumption that such payments bear tax at the lower rate.
F25
In paragraph (c) of section 246D(2) of that Act (application of section 207A to certain foreign income dividends), for the words from “as income” to the end of the paragraph there shall be substituted “
(without prejudice to paragraph (a) above) as if it were income to which section 1A applies;
”
.
F76
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F87
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F128
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F99
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10
F191
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F192
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3
Sections 468E and 468EE of that Act (rate of corporation tax on authorised unit trusts) shall not apply in relation to any accounting period ending after 31st March 1996 except so far as those sections relate to the financial year 1995.
11
1
In section 468L of that Act (interest distributions), after subsection (1) there shall be inserted the following subsection—
1A
For the purposes of this Chapter no amount shall be shown as so available unless the authorised unit trust in question satisfies the qualifying investments test throughout the distribution period.
2
After subsection (7) of that section there shall be inserted the following subsections—
8
For the purposes of this section an authorised unit trust satisfies the qualifying investments test throughout a distribution period (“the relevant period”) if at all times in that period, the market value of the qualifying investments exceeds 60 per cent. of the market value of all the investments of that trust.
9
Subject to subsection (13) below, in this section “qualifying investments”, in relation to an authorised unit trust, means the investments of that trust which are of any of the following descriptions—
a
money placed at interest;
b
securities;
c
shares in a building society;
d
qualifying entitlements to a share in the investments of another authorised unit trust.
10
For the purposes of subsection (9) above an entitlement to a share in the investments of another authorised unit trust is a qualifying entitlement at any time in the relevant period if, and only if, the other authorised unit trust would itself (on the relevant assumption) satisfy the qualifying investments test throughout that period.
11
For the purposes of subsection (10) above the relevant assumption is that the only investments of the other authorised unit trust which are to be regarded as qualifying investments are those falling within paragraphs (a) to (c) of subsection (9) above.
12
In this section “security” does not include shares in a company; and references in this section to investments of an authorised unit trust are references to investments subject to the trusts of that authorised unit trust but do not include references to cash awaiting investment.
13
The Treasury may by order amend subsection (9) above so as to extend or restrict the descriptions of investments of an authorised unit trust that are qualifying investments.
14
An order made by the Treasury under subsection (13) above may—
a
make different provision for different cases; and
b
contain such incidental, supplemental, consequential and transitional provision as the Treasury may think fit;
and, without prejudice to the generality of paragraph (b) above, such an order may make such incidental modifications of subsection (11) above as the Treasury may think fit.
3
This paragraph has effect in relation to distribution periods ending on or after 1st April 1996.
F1112
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F1113
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F1114
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F1115
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F2016
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F1317
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F318
1
In subsection (1) of section 737 of that Act (deductions from manufactured payments), after “shall apply” there shall be inserted “
(subject to subsection (1A) below)
”
, and for subsection (1A) of that section there shall be substituted the following subsection—
1A
The deduction of tax which is deemed to have been made under subsection (1) above shall be taken to have been made at the lower rate as if the deemed annual payment were income to which section 1A applied; and—
a
the reference to the applicable rate in subsection (1) of section 350, so far as it has effect by virtue of subsection (1) above, and
b
Schedule 16, so far as it so has effect,
shall be construed accordingly.
2
This paragraph has effect in relation to payments on or after 6th April 1996.
F419
In section 737C(6) of that Act (computation of amount of deemed manufactured interest), for “basic” there shall be substituted “
lower
”
.
F1420
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F1521
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F1822
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23
In section 822(1) of that Act (over-deductions from interest on loan capital etc. made before the passing of annual Act where basic rate for the year is lower than in the previous year), for “basic rate lower” there shall be substituted “
lower rate less
”
.
F1624
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F1725
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The Finance Act 1989 (c. 26)
F626
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The Taxation of Chargeable Gains Act 1992 (c. 12)
F527
In section 4(3A) of the Taxation of Chargeable Gains Act 1992 (disregard of income chargeable at lower rate in accordance with section 207A of the Taxes Act 1988), for “section 207A” there shall be substituted “
section 1A
”
.
Commencement of Schedule
28
Subject to any express provisions as to commencement that are contained in the preceding provisions of this Schedule, this Schedule has effect for the year 1996-97 and subsequent years of assessment.