SCHEDULES

SCHEDULE 1U.K.Consequential amendments

Part 1 U.K.Income and Corporation Taxes Act 1988

3(1)Amend section 1A (application of lower rate to income from savings and distributions) as follows.

(2)In subsection (1AA)—

(a)in paragraph (a) for “Schedule F” substitute “ Chapter 3, 5 or 6 of Part 4 of ITTOIA 2005 (dividends etc. from UK resident companies etc., stock dividends from UK resident companies and loans to participators) ”, and

(b)for paragraph (b) substitute—

(b)dividends chargeable under Chapter 4 of Part 4 of that Act (dividends from non-UK resident companies) or relevant foreign distributions chargeable under Chapter 8 of Part 5 of that Act (income not otherwise charged).

(3)In subsection (1A)—

(a)in paragraph (a)—

(i)for “Schedule F”, in the first place where it occurs, substitute “ Chapter 3, 5 or 6 of Part 4 of ITTOIA 2005 ”, and

(ii)for “Schedule F”, in the second place where it occurs, substitute “ dividend ”, and

(b)for paragraph (b) and the word “ and ” at the end of the paragraph substitute—

(b)in the case of dividends chargeable under Chapter 4 of Part 4 of that Act or relevant foreign distributions chargeable under Chapter 8 of Part 5 of that Act, the dividend ordinary rate; and.

(4)In subsection (2)—

(a)in paragraph (a) for the words from “chargeable under” to “section 119” substitute (other than relevant foreign income) chargeable under—

(i)Chapter 2 of Part 4 of ITTOIA 2005 (charge on interest);

(ii)Chapter 7 of that Part of that Act (charge on purchased life annuity payments) other than income from annuities specified in section 718(2) of that Act; or

(iii)Chapter 8 of that Part of that Act (charge on profits from deeply discounted securities);,

(b)in paragraph (aa) omit “under Case VI of Schedule D”,

(c)in paragraph (b) for “Schedule F” substitute “ Chapter 3, 5 or 6 of Part 4 of ITTOIA 2005 ”,

(d)in paragraph (c) for “equivalent foreign income” substitute “ income falling within subsection (3) below ”, and

(e)in paragraph (d) for “547(1)(a) (chargeable event gains on life policies etc)” substitute “ 465 of ITTOIA 2005 (gains from contracts for life insurance etc.) ”.

(5)For subsection (3) substitute—

(3)The income which falls within this subsection is any relevant foreign income which—

(a)would fall within subsection (2)(a) but for the exclusion of relevant foreign income;

(b)is a dividend chargeable under Chapter 4 of Part 4 of ITTOIA 2005; or

(c)is a relevant foreign distribution chargeable under Chapter 8 of Part 5 of that Act.

(6)In subsection (4)—

(a)in paragraph (a), for the words from “income” to “Kingdom” substitute “ relevant foreign income which is charged in accordance with section 832 of ITTOIA 2005 (relevant foreign income charged on the remittance basis) ”, and

(b)omit paragraph (b) and the word “or” at the end of paragraph (a).

(7)In subsection (5)—

(a)for “section 550” substitute “ sections 535 to 537 of ITTOIA 2005 ”, and

(b)in paragraph (b)(i) for “Schedule F” substitute “ Chapter 3, 5 or 6 of Part 4 of ITTOIA 2005 ”, and

(c)in paragraph (b) for sub-paragraph (ii) substitute—

(ii)dividends chargeable under Chapter 4 of Part 4 of that Act (if any) or relevant foreign distributions chargeable under Chapter 8 of Part 5 of that Act (if any),.

(8)In subsection (6) for “section 550” substitute “ sections 535 to 537 of ITTOIA 2005 ”.

(9)Omit subsection (7).

(10)After subsection (7) insert—

(8)In this section “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 of that Act if the company were resident in the United Kingdom.

(9)And, for the meaning of “relevant foreign income”, see section 832(1).