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Income Tax (Trading and Other Income) Act 2005

Taxes Management Act 1970

Paragraphs 362, 365 and 371: sections 9D, 12AE(2) and 31(3) of TMA

3484.These amendments repeal the sections of TMA that give effect to the “Crown Option”. Under the “Crown Option” the Inland Revenue has the right to determine under what Case of Schedule D to charge income that falls both within Cases I or II and Cases III, IV or V. In practice this option is always exercised to tax the income under Schedule D Cases I or II.

3485.This Act includes sections that enact the Crown Option by giving priority to the trading income Part if income that is taxed under Schedule D in the source legislation falls within more than one Part. See Change 66 in Annex 1. These priority sections mean that the determination powers in TMA are not required.

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