Part 3Income tax, corporation tax and capital gains tax
Chapter 1Income tax and corporation tax charge and rate bands
Income tax
23Charge and rates for 2004-05
Income tax shall be charged for the year 2004-05, and for that year—
a
the starting rate shall be 10%;
b
the basic rate shall be 22%;
c
the higher rate shall be 40%.
24Personal allowances for those aged 65 or more
1
For the year 2004-05—
a
the amount specified in section 257(2) of the Taxes Act 1988 (claimant aged 65 or more) shall be £6,830; and
b
the amount specified in section 257(3) of that Act (claimant aged 75 or more) shall be £6,950.
2
Accordingly, section 257C(1) of that Act (indexation), so far as it relates to the amounts so specified, does not apply for that year.
Corporation tax
25Charge and main rate for financial year 2005
Corporation tax shall be charged for the financial year 2005 at the rate of 30%.
26Small companies' rate and fraction for financial year 2004
For the financial year 2004—
a
the small companies' rate shall be 19%, and
b
the fraction mentioned in section 13(2) of the Taxes Act 1988 (marginal relief for small companies) shall be 11/400ths.
27Corporation tax starting rate and fraction for financial year 2004
For the financial year 2004—
a
the corporation tax starting rate shall be 0%, and
b
the fraction mentioned in section 13AA of the Taxes Act 1988 (marginal relief for small companies) shall be 19/400ths.
F128The non-corporate distribution rate
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Trusts
29Special rates of tax applicable to trusts
1
Section 686 of the Taxes Act 1988 (accumulation and discretionary trusts: special rates of tax) is amended as follows.
2
In subsection (1A) (which sets certain rates of tax in relation to any year of assessment for which income tax is charged)—
a
in paragraph (a)
(which sets the Schedule F trust rate at 25 per cent) for “25 per cent” substitute “
32.5 per cent
”
, and
b
in paragraph (b)
(which sets the rate applicable to trusts at 34 per cent) for “34 per cent” substitute “
40 per cent
”
.
3
The amendments made by subsection (2) have effect in relation to the year 2004-05 and subsequent years of assessment.
4
Schedule 4 to this Act (which makes amendments relating to the rate applicable to trusts) shall have effect.