SCHEDULES

SCHEDULE 1Consequential amendments

Part 1Income and Corporation Taxes Act 1988

1

The Income and Corporation Taxes Act 1988 (c. 1) is amended as follows.

2

F1. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3

F2. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4

F3. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

5

In section 4 (construction of references in Income Tax Acts to deduction of tax), omit subsection (1B).

F46

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F57

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8

(1)

Amend section 15 (Schedule A) as follows.

(2)

In subsection (1A)—

(a)

in paragraph (b) for “within the charge to income tax under Schedule A” substitute “ the profits of a UK property business within the charge to income tax under Chapter 3 of Part 3 of ITTOIA 2005 ”, and

(b)

for “as separate Schedule A businesses” substitute “ for the purposes of those charges as separate businesses ”.

(3)

Before subsection (4) insert—

“(3A)

Subsection (1) applies for corporation tax purposes (and does not apply for income tax purposes except so far as necessary to ensure its application for corporation tax purposes by virtue of section 9).”

(4)

In subsection (4) at the end insert “ and under Chapter 3 of Part 3 of ITTOIA 2005 (profits of a property business) ”.

9

(1)

Amend section 18 (Schedule D) as follows.

F6(2)

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F6(3)

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(4)

Omit subsection (6).

10

Omit section 20 (Schedule F).

11

Omit section 21 (persons chargeable and basis of assessment under Schedule A).

12

(1)

Amend section 21A (computation of amount chargeable under Schedule A) as follows.

(2)

In subsection (2) omit “sections 112 and 113 of that Act (expenditure in connection with provision of security asset or service);”.

(3)

In subsection (4)—

(a)

omit “section 82 (interest paid to non-residents),”, and

(b)

omit “section 96 (farming and market gardening: relief for fluctuating profits),”.

13

In section 21B (application of other rules applicable to Case I of Schedule D)—

(a)

omit “, 108, 109A”,

(b)

after “(post-cessation receipts and expenses, etc)” insert “ , with any reference to a trade within the charge to income tax being read as a reference to a UK property business ”, and

(c)

omit “section 113 (effect for income tax purposes of change in the persons engaged on trade);”.

14

In section 21C (the Schedule A charge and mutual business)—

(a)

in subsection (1) after “the charge to” insert “ corporation ”, and

(b)

in subsection (4) from the beginning to “the person who would” substitute “ The company to which the profit arises is the company which would ”.

15

(1)

Amend section 30 (expenditure on making sea walls) as follows.

(2)

In subsection (1) for “he shall be” substitute “ that person shall be ”.

(3)

In subsection (2) for “he would be” substitute “ that person would be ”.

(4)

After that subsection insert—

“(2A)

If—

(a)

the transferor is a company within the charge to corporation tax and the transferee is a person within the charge to income tax, or

(b)

the transferor is a person within the charge to income tax and the transferee is a company within the charge to corporation tax,

subsection (2) above shall apply only for the purpose of determining the amount of the payment which the company is treated as making in any year of assessment.

For any entitlement of the person within the charge to income tax to a deduction for any of the expenditure, see sections 316 and 318 of ITTOIA 2005 (corresponding income tax provision).”

16

Omit sections 31A and 31B (deductions for expenditure by landlords on energy-saving items).

F717

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F718

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F719

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F720

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F721

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F722

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F723

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24

(1)

Amend section 42 (appeals against determinations under sections 34 to 36) as follows.

(2)

In subsection (1)—

(a)

after “determination of” insert“—

(a)

 ”,

(b)

for “to tax” substitute “ to corporation tax ”, and

(c)

after “35 or 36” insert“, or

(b)

any amount that under Chapter 4 of Part 3 of ITTOIA 2005 (profits of property businesses: lease premiums etc.) is brought into account as a receipt in calculating the profits of a property business (within the meaning of that Act),”.

(3)

At the end of the side-note insert “ or Chapter 4 of Part 3 of ITTOIA 2005 ”.

25

F8. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

26

F9. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

27

F10. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

28

F11. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

29

F12. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

30

F13. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F1431

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32

(1)

Amend section 53 (farming and other commercial occupation of land (except woodlands)) as follows.

(2)

In subsection (1) after “charged to” insert “ corporation ”.

(3)

In subsection (2)—

(a)

for “person or partnership or body of persons” substitute “ company or partnership ”, and

(b)

after “trade” insert “ for corporation tax purposes ”.

(4)

In subsection (3) after “charged to” insert “ corporation ”.

33

In section 55(1) (mines, quarries and other concerns) after “charged to” insert “ corporation ”.

34

(1)

Amend section 56 (transactions in deposits with and without certificates or in debts) as follows.

(2)

In subsection (2)—

(a)

for “person”, in the first place where it occurs, substitute “ company ”, and

F15(b)

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(3)

In subsection (3)

(a)

for “does” substitute “ and section 551 of ITTOIA 2005 (charge to income tax on profits from disposal of deposit rights) do ”, and

(b)

in paragraph (a) for “person” substitute “ company ”.

35

(1)

Amend section 59 (persons chargeable: Schedule D) as follows.

(2)

Omit subsections (1) and (2).

(3)

In subsection (3)—

(a)

for “that section” substitute “ section 12 of ITTOIA 2005 ”, and

(b)

omit “under Schedule D”.

(4)

In subsection (4) for “Subsections (1) to (3)” substitute “ Subsection (3) ”.

36

Omit sections 60 to 63A (basis of assessment for income tax: Cases I and II of Schedule D).

37

Omit section 64 (Case III assessments).

38

Omit section 65 (Cases IV and V assessments: general).

39

Omit section 65A (Case V income from land outside UK: income tax).

40

Omit section 68 (special rules where property etc. situated in Republic of Ireland).

41

Omit sections 68A to 68C (share incentive plans).

42

Omit section 69 (Case VI assessments).

43

Omit section 71 (computation of income tax where no profits in year of assessment).

F1644

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45

In section 74(1) (general rules as to deductions not allowable)—

(a)

for “the Tax Acts” substitute “ the Corporation Tax Acts ”,

(b)

after “computing the amount of the profits to be charged” insert “ to corporation tax ”,

(c)

for “, profession or vocation”, in each place where it occurs, substitute “ or profession ”,

(d)

omit paragraph (b),

(e)

in paragraph (j) for “his” substitute “ the creditor's ”, and

(f)

omit paragraph (o).

F1746

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47

Omit section 77 (incidental costs of obtaining loan finance).

F1848

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F1849

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F1850

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51

Omit section 80 (expenses connected with foreign trades etc).

52

Omit section 81 (travel between trades etc).

53

Omit section 82 (interest paid to non-residents).

54

In section 82A(1) (expenditure on research and development)—

(a)

for “person” substitute “ company ”,

(b)

for “by him or on his behalf” substitute “ by the company or on the company's behalf ”, and

(c)

before “tax” insert “ corporation ”.

55

In section 82B(1) (payments to research associations, universities etc.)—

(a)

for “person” substitute “ company ”,

(b)

F19. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(c)

before “tax” insert “ corporation ”.

56

In section 83 (patent fees etc. and expenses) after “the profits of a trade” insert “ for the purposes of corporation tax ”.

57

(1)

Amend section 83A (gifts in kind to charities etc.) as follows.

(2)

In subsection (1) for “a person carrying on a trade, profession or vocation” substitute “ a company carrying on a trade or profession ”.

(3)

In subsection (2) for “the donor in the course of his trade” substitute “ the company in the course of its trade ”.

(4)

In subsection (3)—

(a)

for “the donor's” substitute “ the company's ”,

(b)

for “the purposes of the Tax Acts” substitute “ corporation tax purposes ”, and

(c)

for “the donor” substitute “ the company ”.

(5)

In subsection (4)—

(a)

after “in respect of the gift of an article” insert “ made by a company ”,

(b)

for “chargeable period”, in both places where it occurs, substitute “ accounting period ”,

(c)

for “the donor or any person connected with him” substitute “ the company or any person connected with the company ”,

(d)

for “the donor shall” substitute “ the company shall ”,

(e)

before “tax”, in both places where it occurs, insert “ corporation ”, and

(f)

for “he” substitute “ the company ”.

58

(1)

Amend section 84 (gifts to educational establishments) as follows.

(2)

In subsection (1)—

(a)

for “a person carrying on a trade, profession or vocation” substitute “ a company carrying on a trade or profession ”, and

(b)

for “his trade” substitute “ its trade ”.

(3)

In subsection (3)—

(a)

for “the purposes of the Tax Acts” substitute “ corporation tax purposes ”, and

(b)

for “his disposal” substitute “ its disposal ”.

(4)

In subsection (3A) for “above is—” to the end substitute “ the period of two years beginning at the end of the accounting period in which the gift is made. ”

(5)

Omit subsection (3B).

(6)

In subsection (4)—

(a)

after “in respect of the gift of an article” insert “ made by the donor ”,

(b)

for “chargeable period”, in both places where it occurs, substitute “ accounting period ”,

(c)

for “him” substitute “ the donor ”,

(d)

before “tax”, in both places where it occurs, insert “ corporation ”, and

(e)

for “he” substitute “ the donor ”.

59

In section 84A(2)(a) (costs of establishing share option or profit sharing schemes: relief) after “Schedule D” insert “ or Part 2 of ITTOIA 2005 ”.

F2060

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61

In section 86A (charitable donations: contributions to agent's expenses) —

(a)

in subsection (1) for “a person” substitute “ a company ”, and

(b)

in subsection (2)(a) for “, profession or vocation” substitute “ or profession ”.

F2162

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F2163

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F2164

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F2165

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F2166

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F2167

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F2168

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F2169

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F2170

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F2171

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F2172

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F2173

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F2174

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75

Omit section 95A (creative artists: relief for fluctuating profits).

76

Omit section 96 (farming and market gardening: relief for fluctuating profits).

F2277

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F2278

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F2279

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F2280

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F2281

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F2282

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F2283

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F2284

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F2285

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86

Omit section 107 (treatment of receipts as earned income).

87

Omit section 108 (election for carry-back).

88

Omit section 109 (charge under section 104: relief for individuals born before 6th April 1917).

89

(1)

Amend section 109A (relief for post-cessation expenditure) as follows.

(2)

Omit subsection (3).

(3)

In subsection (4) omit the unnumbered paragraph beginning with “If any sum”.

(4)

In subsection (4A) omit the unnumbered paragraph beginning with “If any sum”.

(5)

F23. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(6)

F23. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F2490

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91

Omit section 110A (change of residence) and the italic cross-heading before it.

F2592

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93

Omit section 112 (partnerships controlled abroad).

94

Omit section 113 (effect for income tax of change in ownership of trade, profession or vocation).

F2695

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96

In section 116(4) (arrangements for transferring relief) before “tax” insert “ corporation ”.

F2797

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98

F28. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

99

F29. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

100

F30. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

101

F31. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

102

F32. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

103

In section 119(1) (rent etc. payable in connection with mines, quarries and similar concerns) after “charged to” insert “ corporation ”.

104

In section 120 (rent etc. payable in respect of electric line wayleaves)—

(a)

in subsection (1) after “charged to” insert “ corporation ”,

(b)

in subsection (1A) for “chargeable period” substitute “ accounting period ”, and

(c)

in subsection (1A) after “charged to”, in both places where it occurs, insert “ corporation ”.

105

In section 121 (management expenses of owner or mineral rights) omit subsection (1).

106

(1)

Amend section 122 (relief in respect of mineral royalties) as follows.

(2)

In subsection (1)—

(a)

for the words from “a person resident” to “year of assessment or” substitute “ a company resident in the United Kingdom which in any ”,

(b)

omit “for the purposes of income tax, or as the case may be”,

(c)

for “him” substitute “ it ”, and

(d)

omit “year or” in both places where it occurs.

(3)

In subsection (2)—

(a)

omit the words from “brought into account” to “may be,”, and

(b)

for “subsection (2)” substitute “ subsection (3) ”.

(4)

Omit subsection (4).

F33107

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108

Omit section 127 (enterprise allowance).

109

Omit section 127A (futures and options: transactions with guaranteed returns).

110

In section 128 (commodity and financial futures etc: losses and gains) omit subsection (1).

111

(1)

Amend section 214 (chargeable payments connected with exempt distributions) as follows.

(2)

In subsection (1)—

(a)

in paragraph (a) omit “chargeable to tax under Case VI of Schedule D”, and

(b)

after that paragraph insert—

“(ab)

that income shall be chargeable to tax;”.

(3)

After subsection (1) insert—

“(1A)

Income tax chargeable by virtue of subsection (1) shall be charged on the full amount or value of the payment made in the year of assessment; and the person liable for any tax so charged is the person receiving or entitled to the payment.

(1B)

Corporation tax chargeable by virtue of subsection (1) shall be charged under Case VI of Schedule D.”

112

In section 230 (stock dividends: distributions) for the words from “as mentioned” to “that section)” substitute “ in a case where section 410(2), (3) or (4) of ITTOIA 2005 applies ”.

113

(1)

Amend section 231 (tax credits for certain recipients of qualifying distributions) as follows.

(2)

In subsection (1)—

(a)

for “sections” to “1993” substitute “ sections 231AA and 231AB of this Act ”,

(b)

for the words from “where” to “charged” substitute “ for corporation tax purposes where ”, and

(c)

omit “or a person resident in the United Kingdom, not being a company”.

(3)

Omit subsections (3) and (3AA).

(4)

In subsection (4) for “he” in both places where it occurs substitute “ that person ”.

114

F34. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

115

F35. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

116

In section 231B(4)(b) (consequences of certain arrangements to pass on value of a tax credit) for “section 231(3)” substitute “ section 397(2) of ITTOIA 2005 ”.

117

Omit section 232 (tax credits for non-UK residents).

118

Omit section 233 (taxation of certain recipients of distributions and in respect of non-qualifying distributions).

119

(1)

Amend section 249 (stock dividends treated as income) as follows.

(2)

In subsection (1) for “subsections (7) to (9) below, this section applies” substitute “ subsections (8) and (9) below, this section applies (and accordingly section 230 above and section 410 of ITTOIA 2005 apply) ”.

(3)

Omit subsections (4) to (7).

(4)

In subsection (8)—

(a)

for “subsection (4)” substitute “ section 410(2), (3) or (4) of ITTOIA 2005 ”, and

(b)

omit the words from “and subsections (5)” onwards.

(5)

In subsection (9)(b) for “an individual” to “an amount of income” substitute “ income to be treated as arising to an individual as a result of section 410(2) of ITTOIA 2005 ”.

120

(1)

Amend section 250 (returns) as follows.

(2)

In subsection (5)(c) for “the appropriate amount in cash” substitute “ the cash equivalent of the share capital in accordance with section 412 of ITTOIA 2005 ”.

(3)

In subsection (7) at the end insert “ of this Act or Chapter 5 of Part 4 of ITTOIA 2005 ”.

121

In section 251 (interpretation of sections 249 and 250), omit subsections (2) to (6).

122

Omit sections 251A to 251D (approved share incentive plans).

123

In section 271(1)(a) (deemed surrender in cases of certain loans) for “under section 547” substitute “ by virtue of section 465 of ITTOIA 2005 ”.

F36124

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125

F37. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

126

F38. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

127

F39. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

128

Omit section 314 (divers and diving supervisors).

129

Omit section 322 (consular officers and employees).

130

Omit section 324 (designated international organisations).

131

Omit section 325 (interest on deposits with National Savings Bank).

132

Omit section 326 (interest etc. under contractual savings schemes).

133

Omit sections 326A to 326D (tax-exempt special savings accounts).

134

Omit section 327 (disabled person's vehicle maintenance grant).

135

Omit section 327A (payments to adopters).

136

Omit sections 329 to 329AB (exemption of interest on damages for personal injury and personal injury damages in the form of periodical payments).

137

Omit section 331 (scholarship income).

138

Omit section 331A (student loans: certain interest to be disregarded).

139

Omit section 332(3) (expenditure and houses of ministers of religion).

140

In section 332A (venture capital trusts: reliefs) omit “and distributions by such trusts”.

141

For section 333 substitute—

“333Investment plan regulations

Regulations under Chapter 3 of Part 6 of ITTOIA 2005 (income from individual investment plans) may include provision generally for the purpose of the administration of corporation tax in relation to plans.”

142

Omit section 333A (personal equity plans: tax representatives).

143

F40. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

144

F41. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

145

(1)

Amend section 337 (company beginning or ceasing to carry on trade) as follows.

(2)

In subsection (1) after “shall be computed” insert “ for the purposes of corporation tax ”.

(3)

In subsection (2) after “overseas property business” insert “ (within the meaning given by section 70A(4)) ”.

146

(1)

Amend section 347A (general rule: annual payments) as follows.

(2)

F42. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3)

F42. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4)

Omit subsections (4) and (5).

(5)

F42. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

147

F43. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

148

F44. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

149

F45. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

150

F46. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

151

F47. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

152

In section 353(1) (relief for payments of interest) after “sections 359 to 368” insert “ of this Act and section 52 of ITTOIA 2005 ”.

153

F48. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

154

F49. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

155

In section 370(2)(b) (relevant loan interest) for the words from “either” to the end substitute “ would be eligible for relief under section 353 ”.

156

F50. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

157

F51. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

158

In section 382(3) (provisions supplementary to sections 380 and 381) omit “under the provisions of the Income Tax Acts applicable to Case I or II of Schedule D”.

159

F52. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

160

F53. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

161

In section 385(4) (carry-forward against subsequent profits) omit “under Case I of Schedule D” and, in both places where it occurs, “under that Case”.

162

In section 386(1) (carry-forward where business transferred to a company) omit “under Schedule D”.

163

F54. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

164

F55. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

165

F56. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

166

F57. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

167

F58. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

168

F59. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

169

(1)

Amend section 397 (restriction of relief in case of farming and market gardening) as follows.

(2)

In subsection (5) (restriction of relief in case of farming and market gardening) for the definitions of “farming” and “market gardening” substitute—

““farming” and “market gardening” shall be construed—

(a)

for income tax purposes, in accordance with the definitions in section 876 of ITTOIA 2005, and

(b)

for corporation tax purposes, in accordance with the definitions in section 832 but as if those definitions were not restricted to activities in the United Kingdom.”

(3)

F60. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4)

In subsection (8) for the words from “, a trade shall be treated” to the end substitute“—

(a)

a trade shall be treated as discontinued, and a new trade set up, in any event which under any of the provisions of the Tax Acts is to be treated as equivalent to the permanent discontinuance or setting up of a trade; and

(b)

without prejudice to paragraph (a), a trade shall be treated as discontinued, and a new trade set up, at any time when there is a change in the persons carrying on the trade which involves all of the persons carrying it on before the change permanently ceasing to carry it on.”

(5)

In subsection (10) for the words from the beginning to “any discontinuance, and as if” substitute “ Where at any time there has been a change in the persons carrying on a trade, this section shall, notwithstanding subsection (8) above, apply as if ”.

170

In section 398 (loss relief for transactions in deposits with and without certificates or in debts)—

(a)

F61. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(b)

F61. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(c)

for “tax under Schedule D” substitute “ corporation tax under Schedule D or income tax under that Act ”.

171

(1)

Amend section 399 (dealings in commodity futures etc: withdrawal of loss relief) as follows.

(2)

Omit subsections (1) and (1A).

(3)

F62. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4)

In subsection (5) omit the words from “and the reference” to the end.

F63172

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

173

In section 417(3)(b) (meaning of “associate” etc.) for “Chapter 1A of Part XV (see section 660G(1) and (2))” substitute “ Chapter 5 of Part 5 of ITTOIA 2005 (see section 620 of that Act) ”.

174

(1)

Amend section 421 (taxation of borrower where loan under section 419 released etc.) as follows.

(2)

In subsection (1)—

(a)

for “advance and” substitute “ advance made to the trustees of a trust and after the trust has ended ”,

(b)

in paragraph (a) for “the total income of the person to whom the loan or advance was made”, “him” and “Schedule F” substitute “ the income of the person from whom the debt was due (“the debtor”) for corporation tax purposes ”, “ the debtor ” and “ dividend ” respectively,

(c)

in paragraph (b) for “he shall not be liable to pay income tax at the Schedule F” substitute “ the debtor shall not be liable to pay corporation tax at the dividend ”, and

(d)

omit paragraphs (c) and (d).

(3)

Omit subsections (2) and (3).

175

F64. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

176

In section 431D(3)(b) (meaning of “overseas life assurance business”) after “Chapter II of Part XIII” insert “ or Chapter 9 of Part 4 of ITTOIA 2005 ”.

177

In section 434 (franked investment income etc.) omit subsection (1A).

178

(1)

Amend section 437 (general annuity business) as follows.

(2)

In subsection (1C)(b)(ii) after “capital elements” insert “ and amounts exempt under section 717 of ITTOIA 2005 ”.

(3)

Omit “and” at the end of subsection (1C)(b).

(4)

After subsection (1C)(c) insert“and

(d)

the amounts exempt under section 717 of ITTOIA 2005 shall be determined in accordance with Chapter 7 of Part 6 of that Act, but for this purpose—

(i)

it is immaterial whether or not an annuitant claims any relief to which the annuitant is entitled under that section; and

(ii)

where, by virtue of section 718 of that Act, section 717 does not apply to an annuity, the annuity shall be treated as being exempt to the same extent that it would have been apart from that section.”

179

(1)

Section 468J (dividend distributions of authorised unit trusts) is amended as follows.

(2)

In subsection (2) for “Tax Acts” substitute “ Corporation Tax Acts ”.

(3)

At the end of subsection (4) insert “(including a dividend treated as paid to a unit holder who is not liable to corporation tax)”.

180

(1)

Section 468L (interest distributions of authorised unit trusts) is amended as follows.

(2)

In subsection (1A) after “this Chapter” insert “ and Chapter 2 of Part 4 of ITTOIA 2005 (interest) ”.

(3)

In subsection (2) for “Tax Acts” substitute “ Corporation Tax Acts ”.

(4)

At the end of subsection (3) insert “(including a payment of interest treated as made to a unit holder who is not liable to corporation tax)”.

181

F65. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F66182

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F67183

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

184

(1)

Amend section 477A (building societies: regulations for deduction of tax) as follows.

(2)

In subsection (4)—

(a)

for “terminal bonus” substitute “ interest ”, and

(b)

for “contractual savings scheme” substitute “ SAYE savings arrangement ”.

(3)

Omit subsections (5) and (6).

(4)

In subsection (9) omit the words from “but” to the end of the subsection.

(5)

In subsection (10) after “this section—” insert—

““certified SAYE savings arrangement” has the meaning given by section 703 of ITTOIA 2005”.

185

Omit section 480C (relevant deposits: computation of tax on interest).

186

F68. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

187

F69. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

188

(1)

Section 486 (industrial and provident societies and co-operative associations) is amended as follows.

(2)

In subsection (1)—

(a)

after “distribution” insert “ for the purposes of corporation tax ”, and

(b)

for “the purposes of corporation tax” substitute “ those purposes ”.

(3)

In subsection (4) at the end insert “for the purposes of corporation tax”.

(4)

Omit subsection (5).

F70189

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

190

(1)

Amend section 492 (treatment of oil extraction activities etc for tax purposes) as follows.

(2)

In subsection (1) for “for all purposes of income tax, and for the purposes of the charge of corporation tax on income,” substitute “ for the purposes of the charge of corporation tax on income ”.

(3)

In subsection (4)—

(a)

in paragraph (a) after “are treated by virtue of” insert “ section 16(1) of ITTOIA 2005 or ”,

(b)

in paragraph (a) for “the purposes specified in that subsection” substitute “ income tax purposes or (as the case may be) for the purposes of the charge of corporation tax on income ”,

(c)

in paragraph (b) after “but which, apart from” insert “ section 16(1) of ITTOIA 2005 or ”, and

(d)

after “notwithstanding anything in that” insert “ section or ”.

191

In section 493(2)(a)(i) (valuation of oil disposed of or appropriated in certain circumstances) for “falling within section 492(1)(a) or (b)” substitute “ falling within the definition of “oil-related activities” in section 16(2) of ITTOIA 2005 or within section 492(1)(a) or (b) above ”.

192

In section 495(2) (regional development grants) for “section 492(1)” substitute “ section 16(1) of ITTOIA 2005 or section 492(1) above ”.

193

In section 496(1)(c) (tariff receipts and tax-exempt tariffing receipts) for “section 492(1)” substitute “ section 16(1) of ITTOIA 2005 or section 492(1) above ”.

194

In section 502(1) (interpretation of Chapter 5), in the definition of “ring fence trade”—

(a)

in paragraph (a) for “any of paragraphs (a) to (c) of subsection (1) of section 492” substitute “ the definition of “oil-related activities” in section 16(2) of ITTOIA 2005 or within section 492(1) above ”, and

(b)

in paragraph (b) for “that subsection” substitute “ section 16(1) of ITTOIA 2005 or section 492(1) above ”.

195

(1)

Amend section 503 (letting of furnished holiday accommodation treated as a trade for certain purposes) as follows.

(2)

In subsection (1)—

(a)

for “specified in subsection (2)” substitute “ of Chapter 2 of Part 10 (loss relief for corporation tax) ”,

(b)

omit “in the United Kingdom”,

(c)

after “chargeable to” insert “ corporation ”, and

(d)

for “particular person or partnership or body of persons” substitute “ particular company or partnership ”.

(3)

Omit subsections (2) and (3).

(4)

In subsection (5)—

(a)

for “Part X” substitute “ Chapter 2 of Part 10 ”, and

(b)

after “other provision of the” insert “ Corporation ”.

(5)

In the side-note after “certain” insert “ corporation tax ”.

196

(1)

Amend section 504 (meaning of the “commercial letting of furnished accommodation”) as follows.

(2)

Omit subsection (4).

(3)

In subsection (6)—

(a)

omit “year of assessment or”,

(b)

for “person” substitute “ company ”,

(c)

omit “year or” in each place where it occurs,

(d)

for “he” substitute “ the company ”, and

(e)

for “him” substitute “ the company ”.

(4)

In subsection (6A) for “above is—” to the end substitute “ above is the period of two years beginning at the end of the accounting period in which the accommodation was let. ”

(5)

In subsection (7)—

(a)

omit “year of assessment or”, and

(b)

omit “year or” in both places where it occurs.

(6)

In subsection (8) omit “year of assessment or”.

(7)

In subsection (9)—

(a)

for “a person” substitute “ a company ”, and

(b)

for “he” substitute “ it ”.

197

F71. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

198

(1)

Amend section 505 (charities: general) as follows.

(2)

In subsection (1)—

(a)

F72. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(b)

F72. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(c)

in paragraph (c)(iia) omit “IV or”,

(d)

F72. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(e)

in paragraph (c)(iib) from “income” to “and” at the end of sub-paragraph (iib) substitute “ such dividends as would, in the case of income tax, be chargeable to tax under Chapter 4 of Part 4 of ITTOIA 2005 or such distributions (other than dividends) as would, in the case of income tax, be chargeable to tax under Chapter 8 of Part 5 of that Act so far as it would apply to what would be a relevant foreign distribution, ”,

(f)

F72. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(g)

F72. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(h)

F72. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(i)

F72. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3)

After subsection (1) insert—

“(1AA)

In subsection (1)(c)(iiaa) and (iib) “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.”

(4)

In subsection (2) after “chargeable to”, in the second place where it occurs, insert “ income tax under Chapter 7 of Part 5 of ITTOIA 2005 (annual payments not otherwise charged) so far as it does not apply to relevant foreign income and shall be chargeable to corporation ”.

199

F73. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

200

Omit section 514 (funds for reducing the national debt).

F74201

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F74202

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F74203

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

204

In section 527(4) (spreading of royalties over several years) at the end insert “ of this Act or by virtue of section 595 of ITTOIA 2005 ”.

F75205

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

206

Omit section 529 (patent income to be earned income in certain cases).

F76207

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F76208

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F76209

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F77210

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F77211

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F77212

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F77213

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F77214

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F77215

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F77216

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F77217

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F77218

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F77219

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F77220

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F77221

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

222

(1)

Amend section 552 (information: duty of insurers) as follows.

(2)

In subsection (1) omit “within the meaning of this Chapter”.

(3)

In subsection (5)—

(a)

in paragraph (b)(ii) for “, the date” to the end of the sub-paragraph substitute “ of this Act and section 514(1) of ITTOIA 2005 (chargeable events where transaction-related calculations show gains), the date on which the year and the insurance year end; ”,

(b)

in paragraph (c)—

(i)

after “this Chapter” insert “ and Chapter 9 of Part 4 of ITTOIA 2005 ”,

(ii)

after “relevant capital payments” insert “ and the amount or value of any capital sums of a kind referred to in section 492(1)(b) to (e) of ITTOIA 2005 ”,

(iii)

in sub-paragraph (iii) after “annuity” insert “ determined in accordance with section 656 and the amount of so much of any payment previously made on account of an annuity as is exempt under section 717 of ITTOIA 2005 ”, and

(iv)

in sub-paragraph (v) after “year” insert “ and the total of the amounts of gains treated as arising on previous chargeable events within section 509(1) or 514(1) of ITTOIA 2005 ”,

(c)

for paragraph (e) substitute—

“(e)

the number of years relevant for computing the annual equivalent of the amount of the gain for the purposes of subsection (1) of section 536 of ITTOIA 2005 (top slicing relieved liability: one chargeable event), apart from subsections (6) and (8) of that section;”, and

(d)

for paragraph (f) substitute—

“(f)

on the assumption that section 465 of ITTOIA 2005 (person liable: individuals) has effect in relation to the gain —

(i)

whether an individual would fall to be treated as having paid income tax at the lower rate on the amount of the gain in accordance with section 530 of that Act; and

(ii)

if so, except in a case where paragraph (c) above applies, the amount of such tax that would fall to be so treated as paid.”

(4)

In subsection (6)—

(a)

in paragraph (b)—

(i)

after “section 546C(7)(a)” insert “ of this Act (and section 514(1) of ITTOIA 2005) ”, and

(ii)

after “year” insert “ (and the insurance year) ”, and

(b)

in paragraph (c) after “section 546C(7)(a)” insert “ of this Act (and section 514(1) of ITTOIA 2005) ”.

(5)

In subsection (7)(b)—

(a)

after “section 546C(7)(a)” insert “ of this Act (and section 514(1) of ITTOIA 2005) ”, and

(b)

after “year” insert “ (and the insurance year) ”.

(6)

In subsection (9)(a)—

(a)

after “section 546C(7)(b)” insert “ of this Act (and section 514(1) of ITTOIA 2005) ”, and

(b)

after “occurs” insert “ (and the end of the insurance year mentioned in section 514(3) and (4) of ITTOIA 2005) ”.

(7)

In subsection (10)—

(a)

in the definition of “amount” after “section 553(3)” insert “ of this Act and section 528 of ITTOIA 2005 ”, and

(b)

insert in the appropriate place—

““chargeable event” means an event which is a chargeable event within the meaning of this Chapter and Chapter 9 of Part 4 of ITTOIA 2005;”.

223

In section 552ZA(3) (information: supplementary provisions) after “section 546C(7)(a)” insert “ of this Act and section 514(1) of ITTOIA 2005 ”.

224

(1)

Amend section 552A (tax representatives) as follows.

(2)

In subsection (5) omit “in relation to which this Chapter has effect and”.

(3)

In subsection (12) insert in the appropriate place—

““capital redemption policy” means a capital redemption policy in relation to which this Chapter and Chapter 9 of Part 4 of ITTOIA 2005 have effect;”,

““contract for a life annuity” means a contract for a life annuity in relation to which this Chapter and Chapter 9 of Part 4 of ITTOIA 2005 have effect;”, and

““policy of life insurance” means a policy of life insurance in relation to which this Chapter and Chapter 9 of Part 4 of ITTOIA 2005 have effect;”.

225

In section 552B (duties of overseas insurers' tax representatives) after subsection (5) insert—

“(5A)

In subsection (5) “chargeable event” has the same meaning as in section 552 (see subsection (10) of that section).”

F78226

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F78227

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F78228

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

229

Omit section 554 (borrowings on life policies to be treated as income in certain cases).

F79230

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

231

Omit section 557 (charge on profits).

232

In section 568(1) (deductions from profits of contributions paid under certified schemes)—

(a)

after “section 74” insert “ of this Act or section 33 of ITTOIA 2005 ”, and

(b)

after “Case I of Schedule D,” insert “ or under Part 2 of ITTOIA 2005, ”.

233

In section 570(4) (payments under certified schemes which are not repayments of contributions) for “any of the provisions of section 113 or section 337(1)” substitute “ section 337(1) above or section 18 of ITTOIA 2005 (companies beginning or ceasing to carry on trade) ”.

F80234

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F80235

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F80236

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

237

In section 578(1) (housing grants) for “any tax purpose” substitute “ corporation tax purposes ”.

F81238

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F82239

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

240

Omit sections 580A to 580C (relief from tax on annual payments under certain insurance policies and immediate needs annuities).

241

Omit section 581 (borrowing in foreign currency by local authorities and statutory corporations).

242

F83. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F84243

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

244

Omit section 583 (Inter-American Development Bank).

F85245

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

246

Omit section 585 (relief from tax on delayed remittances).

F86247

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F87248

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

249

F88. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F89250

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F90251

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

252

(1)

Amend section 591C (cessation of approval: tax on certain schemes) as follows.

(2)

In subsection (1) for “tax shall be charged” substitute “ income tax shall be charged under and ”.

(3)

In subsection (2) omit “under Case VI of Schedule D”.

(4)

In subsection (6A)(c)(iii) for “Schedule D” substitute “ Part 2 of ITTOIA 2005 ”.

253

(1)

Amend section 592 (exempt approved schemes) as follows.

(2)

In subsection (3)—

(a)

after “the schemes” insert “ , are not relevant foreign income ”, and

(b)

for “Case VI of Schedule D” substitute “ Chapter 8 of Part 5 of ITTOIA 2005 (income not otherwise charged) ”.

(3)

In subsection (4)(a) after “for the purposes of” insert “ Part 2 of ITTOIA 2005 or ”.

254

(1)

Amend section 598 (charge to tax: repayment of employee's contributions) as follows.

(2)

In subsection (1) after “this section,” insert “ income ”.

(3)

In subsection (2) for the words from the beginning to “Schedule D” substitute “ The person liable for any tax chargeable under this section shall be the administrator of the scheme ”.

255

(1)

Amend section 599 (charge to tax: commutation of entire pension in special circumstances) as follows.

(2)

In subsection (1) after “whether wholly or not, under the rule,” insert “ income ”.

(3)

In subsection (1B) before “tax” insert “ income ”.

(4)

In subsection (3) for the words from the beginning to “Schedule D on that amount,” substitute “ The person liable for any tax chargeable under this section shall be the administrator of the scheme ”.

256

In section 599A (charge to tax: payments out of surplus funds) for subsection (2) substitute—

“(2)

On the making of a payment to which subsection (1) above applies—

(a)

income tax is charged at the relevant rate on such amount as, after deduction of tax at that rate, would equal the amount of the payment, and

(b)

the person liable for the tax so charged is the administrator of the scheme.”

257

In section 601(5)(b) (charge to tax: payments to employers) for “to tax on the amount of the payment under Case VI of Schedule D” substitute“—

(i)

to income tax on the full amount of the payment arising in the year of assessment; or

(ii)

to corporation tax on the amount of the payment under Case VI of Schedule D”.

258

In section 602(1)(a) (regulations relating to pension fund surpluses) omit “under Case VI of Schedule D”.

259

(1)

Amend section 607 (pilots' benefit fund) as follows.

(2)

In subsection (2)(c) for “the provisions of Case II of Schedule D” substitute “ such of the provisions of Part 2 of ITTOIA 2005 as apply in calculating the profits of a profession ”.

(3)

In subsection (3)(a) for “in assessing tax under Schedule D” substitute “ in calculating the profits of the profession ”.

260

In section 608(2) (superannuation funds approved before 6th April 1980)—

(a)

in paragraph (b)—

(i)

after “commissions” insert “ which are not relevant foreign income and ”, and

(ii)

for “Case VI of Schedule D” substitute “ Chapter 8 of Part 5 of ITTOIA 2005 ”, and

(b)

in paragraph (c) for the words from “under” onwards substitute “ under Chapter 11 of Part 4 of ITTOIA 2005 (transactions in deposits) by virtue of a disposal of deposit rights falling within section 552(1)(a) or (b) of that Act ”.

261

In section 614(2A) (exemptions and reliefs in respect of income from investments etc. of certain pension schemes) for the words from “paragraph 1” to “(relevant” substitute “ Chapter 8 of Part 4 of ITTOIA 2005 (profits from deeply ”.

F91262

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

263

(1)

Amend section 623 (relevant earnings) as follows.

(2)

In subsection (2)—

(a)

in paragraph (c) for “Schedule D” substitute “ Part 2 of ITTOIA 2005 ”, and

(b)

for paragraph (d) substitute—

“(d)

income to which section 833(5B) (patent income) applies;”.

(3)

In subsection (6)—

(a)

in paragraph (a) for “section 74(m), (p) or (q)” substitute “ section 51 of ITTOIA 2005 ”, and

(b)

after the “or” at the end of that paragraph insert—

“(aa)

deductions in respect of any annuity or other annual payment (other than interest) payable out of his profits; or”.

264

In section 644(2) (meaning of “relevant earnings”)—

(a)

in paragraph (c) for “Schedule D” substitute “ Part 2 of ITTOIA 2005 ”, and

(b)

for paragraph (d) substitute—

“(d)

income to which section 833(5B) (patent income) applies.”

265

In section 646(2) (meaning of “relevant net earnings”)—

(a)

in paragraph (a) for “section 74(m), (p) or (q)” substitute “ section 51 of ITTOIA 2005 ”,

(b)

after that paragraph insert—

“(aa)

deductions in respect of any annuity or other annual payment (other than interest) payable out of his profits;”, and

(c)

in paragraph (bb) for “section 332(3) of this Act” substitute “ section 159 of ITTOIA 2005 ”.

266

(1)

Amend section 648B (return of contributions after pension date) as follows.

(2)

In subsection (1) for “Tax” substitute “ Income tax ”.

(3)

In subsection (2) for the words from the beginning to “Schedule D” substitute “ The person liable for any tax chargeable under this section shall be the administrator of the scheme ”.

267

(1)

Amend section 650A (charge on withdrawal of approval from arrangements) as follows.

(2)

In subsection (1) for “tax shall be charged” substitute “ income tax shall be charged under and ”.

(3)

In subsection (2) omit “under Case VI of Schedule D”.

268

F92(1)

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F93(2)

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3)

F94. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F95269

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

270

F96. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

271

Omit sections 660A and 660B (income arising under settlement where settlor retains an interest and payments to unmarried minor children of settlor).

272

(1)

Amend section 660C (nature of charge on settlor) as follows.

(2)

Omit subsections (1) to (2).

(3)

F97. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4)

F98. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

273

Omit sections 660D to 660G (settlements: supplementary provisions etc.).

274

Omit section 677 (sums paid to settlor otherwise than as income).

275

Omit section 678 (capital sums paid by body connected with settlement).

276

Omit sections 682 and 682A (ascertainment of undistributed income and supplementary provisions for Chapter 1B).

277

F99. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

278F100

279

Omit section 688 (schemes for employees and directors to acquire shares).

280

(1)

Amend section 689B (order in which expenses to be set against income: trust management expenses) as follows.

(2)

In subsection (2) for paragraphs (za) to (c) substitute—

“(a)

so much of the income of the trustees as is income chargeable under Chapter 3 of Part 4 of ITTOIA 2005 (dividends etc. from UK resident companies etc.);

(b)

income treated as arising to the trustees under Chapter 5 of that Part (stock dividends from UK resident companies); or

(c)

income chargeable under Chapter 6 of that Part (release of loan to participator in close company).”

(3)

In subsection (2A) for “income to which section 1A applies” to the end substitute“—

(a)

income chargeable under Chapter 4 of Part 4 of ITTOIA 2005 (dividends from non-UK resident companies); or

(b)

a relevant foreign distribution chargeable under Chapter 8 of Part 5 of that Act (income not otherwise charged).”

(4)

After that subsection insert—

“(2B)

In subsection (2A) “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.”

281F101

282

F102. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

283

F103. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F104284

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F104285

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F104286

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F104287

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

288

F105. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

289

Omit section 699 (relief from higher rate tax for inheritance tax on accrued income).

F106290

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

291

(1)

Amend section 700 (adjustments and information) as follows.

F107(2)

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F107(3)

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F107(4)

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(5)

In subsection (4) after “this Part” insert “ or Chapter 6 of Part 5 of ITTOIA 2005 ”.

(6)

In subsection (5)—

(a)

in paragraph (a) for “a year of assessment” substitute “ an accounting period ”,

(b)

omit “and” at the end of paragraph (a),

(c)

after paragraph (a) insert—

“(aa)

the amount treated as estate income under Chapter 6 of Part 5 of ITTOIA 2005 in respect of that interest or the exercise of that discretion for which he is liable to income tax for a year of assessment, and”,

(d)

in paragraph (b) after “paragraph (a)” insert “ or (aa) ”,

(e)

for “any year of assessment” substitute “ any accounting period under this Part or treated as estate income under that Chapter ”,

(f)

after “the purposes of this Part” insert “ or that Chapter ”, and

(g)

for “paragraphs (a) and (b)” substitute “ paragraphs (a) to (b) ”.

F108292

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

293

F109. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

294

F110. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

295

F111. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

296

F112. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

297

F113. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

298

F114. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

299

F115. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F116300

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

301

Omit section 730C (exchanges of gilts: traders etc.).

F117302

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F118303

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

304

F119. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

305

F120. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

306

F121. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

307

F122. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

308

(1)

Amend section 761 (charge to income tax or corporation tax of offshore income gain) as follows.

(2)

In subsection (1) for the words from “of that gain shall be treated for all” to the end substitute“of that gain—

(a)

shall be treated for all the purposes of the Tax Acts as income arising at the time of the disposal to the person making the disposal, and

(b)

shall be charged—

(i)

to income tax for the year of assessment in which the disposal is made, or

(ii)

to corporation tax as a profit or gain under Case VI of Schedule D for the accounting period in which the disposal is made.”

(3)

After that subsection insert—

“(1A)

The income tax charged by virtue of subsection (1)(b)(i) above shall be charged on the full amount of the income treated as arising in the year of assessment.”

309

In section 762(6) (offshore income gains accruing to persons resident or domiciled abroad)—

(a)

after “740” insert “ above ”, and

(b)

for “Part XV” substitute “ Chapter 5 of Part 5 of ITTOIA 2005 ”.

310

In section 774(1) (transactions between dealing company and associated company)—

(a)

after “shall be chargeable” insert “ to tax ”, and

(b)

for “under Case VI of Schedule D” substitute “ (in the case of corporation tax, under Case VI of Schedule D) ”.

311

F123. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

312

(1)

Amend section 776 (transactions in land: taxation of capital gains) as follows.

(2)

In subsection (3)(a) omit the words from “, and which constitutes” to “period in which the gain is realised”.

F124(3)

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4)

In subsection (6)—

(a)

in paragraph (a) after “the profits under” insert “ Part 2 of ITTOIA 2005 or ”, F125...

F125(b)

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(5)

F126. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

313

(1)

Amend section 777 (tax avoidance: provisions supplementary to sections 775 and 776) as follows.

(2)

F127. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3)

In subsection (10) for “Part XV” substitute “ Chapter 5 of Part 5 of ITTOIA 2005 (settlements: amounts treated as income of settlor) ”.

314

(1)

Amend section 779 (sale and lease-back: limitation on tax reliefs) as follows.

F128(2)

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3)

In subsection (13)—

(a)

after paragraph (a) insert—

“(aa)

a deduction in calculating the profits of a UK property business;”,

(b)

in paragraph (c) omit “392 or”, and

(c)

after that paragraph insert—

“(ca)

a deduction in computing profits or other income or gains chargeable to income tax under or by virtue of any provision to which section 836B applies, or in computing any loss for which relief is allowable under section 392;”.

315

(1)

Amend section 780 (sale and lease-back: taxation of consideration received) as follows.

(2)

In subsection (3)(b) for “a profit or gain chargeable under Case VI of Schedule D” substitute “ an amount chargeable to tax in accordance with subsection (3A) ”.

(3)

After subsection (3) insert—

“(3A)

The amount shall be charged—

(a)

to income tax, or

(b)

to corporation tax as a profit or gain under Case VI of Schedule D.

(3B)

The income tax charged by virtue of subsection (3A)(a) above shall be charged on the full amount of the proportion of the consideration concerned arising in the year of assessment; and the person liable for any tax so charged is the lessee.”

316

(1)

Amend section 781 (assets leased to traders and others) as follows.

(2)

In subsection (1) for “under Case VI of Schedule D for the chargeable period in which the sum is obtained with tax” substitute “ to tax (in the case of corporation tax, under Case VI of Schedule D) for the chargeable period in which the sum is obtained ”.

(3)

In subsection (4) after paragraph (a) insert—

“(ab)

a deduction in computing profits or other income or gains chargeable to income tax under or by virtue of any provision to which section 836B applies, or in computing any loss for which relief is allowable under section 392;”.

(4)

In subsection (4)(b) omit “392 or”.

317

In section 782(9) (leased assets: special cases) for “section 113 or 337(1)” substitute “ section 18 of ITTOIA 2005 or section 337(1) above (companies beginning or ceasing to carry on trade) ”.

318

In section 783(10)(b) (leased assets: supplemental) for “section 660G(1) and (2)” substitute “ section 620 of ITTOIA 2005 ”.

319

In section 785 (meaning of “asset”, “capital sum” and “lease” for purposes of sections 781 to 784), in the definition of “capital sum”, after “chargeable” insert “ to income tax under or by virtue of any provision to which section 836B applies or to corporation tax ”.

320

(1)

Amend section 786 (transactions associated with loans or credit) as follows.

(2)

In subsection (3) for the words from “annuity” to “Schedule D” substitute “ relevant annual payment ”.

(3)

After that subsection insert—

“(3A)

In subsection (3) “relevant annual payment” means a payment which is not interest but is—

(a)

an annuity or other annual payment falling within Part 5 of ITTOIA 2005 and chargeable to income tax otherwise than as relevant foreign income; or

(b)

an annuity or other annual payment chargeable to corporation tax under Case III of Schedule D.”

(4)

In subsection (5) for “he shall be chargeable to tax under Case VI of Schedule D on a sum” substitute“he shall be chargeable—

(a)

to income tax, or

(b)

to corporation tax under Case VI of Schedule D,

on a sum ”.

(5)

After that subsection insert—

“(5A)

Income tax charged by virtue of subsection (5)(a) above shall be charged on the full amount of the income assigned, surrendered, waived or forgone in the year of assessment.”

321

(1)

Amend section 788 (relief by agreement with other territories) as follows.

(2)

In subsection (3)(d) for “section 231” substitute “ section 397(1) of ITTOIA 2005 ”.

F129(3)

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

322

In section 790(11) (unilateral relief) after “and, in the case of an assessment” insert “ to corporation tax ”.

323

(1)

Amend section 804 (relief against income tax in respect of earlier years of commencement) as follows.

(2)

In subsections (5)(b) and (5A)(b) for “section 63A(1) or (3)” substitute “ section 205 or 220 of ITTOIA 2005 ”.

(3)

In subsection (5B)(a)—

(a)

for “under Case VI of Schedule D” substitute “ to income tax ”, and

(b)

after “equal to the excess” insert “ and be liable for any tax so chargeable ”.

(4)

In subsection (5C) for “section 63A(1)” substitute “ section 220 of ITTOIA 2005 ”.

(5)

In subsection (8), in the definition of “overlap profit” for “sections 60 to 62” substitute “ Chapter 15 of Part 2 of ITTOIA 2005 ”.

324

In section 806K(2) (application of foreign dividend provisions to branches or agencies in the UK of persons resident elsewhere) after paragraph (b) insert—

“(bb)

in relation to income tax, take any reference to a dividend chargeable under Case V of Schedule D as a reference to a dividend chargeable under Chapter 4 of Part 4 of ITTOIA 2005;”.

325

In section 807(1)(b) (sale of securities with or without accrued interest) for “Case IV or V of Schedule D” substitute “ ITTOIA 2005 on relevant foreign income ”.

326

In section 812(1) (withdrawal of right to tax credit of certain non-resident companies connected with unitary states)—

(a)

for “section 231(3)” substitute “ section 397(2)(a) of ITTOIA 2005 ”, and

(b)

for “or, where” substitute “ nor, by virtue of section 30(9) of the Finance (No. 2) Act 1997, where ”.

F130327

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

328

F131. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

329

F132. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

330

In section 821(1) (under-deductions from payments made before passing of annual Act)—

(a)

after “assessment” insert “ or accounting period ”,

(b)

after “quarterly payments” insert “ (or half-periodic or quarterly payments) ”,

(c)

after “income” insert “ or corporation ”,

(d)

after “year”, in the second and third places where it occurs, insert “ or period ”,

(e)

after “charged”, in the fourth place where it occurs, insert “ in respect of those payments to income tax under Chapter 2 of Part 4 of ITTOIA 2005 (interest) or shall be charged to corporation tax under ”, and

(f)

omit “in respect of those payments”.

331

(1)

Section 824 (repayment supplements: individuals and others) is amended as follows.

(2)

In subsection (4A)(b) for “section 231” substitute “ section 397(1) of ITTOIA 2005 ”.

(3)

Omit subsection (8).

(4)

In subsection (9) for “to (8)” substitute “ to (7) ”.

F133332

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

333

F134. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

334

(1)

Amend section 828 (orders and regulations made by the Treasury or the Board) as follows.

(2)

In subsection (4) omit “324,”.

(3)

In subsection (5)—

(a)

F135. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(b)

F135. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(c)

for “that Act” substitute “ either of those Acts ”.

F136335

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

336

In section 831(3) (interpretation of ICTA) after the entry relating to “ITEPA 2003” insert—

““ITTOIA 2005” means the Income Tax (Trading and Other Income) Act 2005;”.

337

In section 832(1) (interpretation of the Tax Acts)—

(a)

for the definition of “overseas property business” substitute—

““overseas property business”—

(a)

for the purposes of income tax, has the meaning given by Chapter 2 of Part 3 of ITTOIA 2005;

(b)

for the purposes of corporation tax, has the meaning given by section 70A(4);”,

(b)

F137. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(c)

in the definition of “Schedule A business” for “income tax” substitute “ corporation tax ”,

(d)

F137. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(e)

for the definition of “tax credit” substitute—

““tax credit” means—

(a)

a tax credit under section 231 for the purposes of corporation tax; and

(b)

a tax credit under section 397(1) of ITTOIA 2005 for the purposes of income tax;”,

(f)

F137. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(g)

omit the definition of “Ulster Savings Certificates”.

338

F138. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

339

F139. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

340

F140. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

341

In section 839(3) (connected persons) for “Chapter 1A of Part XV (see section 660G(1) and (2))” substitute “ Chapter 5 of Part 5 of ITTOIA 2005 (see section 620 of that Act) ”.

342

Omit Schedule 4A (creative artists: relief for fluctuating profits).

343

(1)

Amend Schedule 5 (treatment of farm animals etc for the purposes of Case I of Schedule D) as follows.

(2)

In paragraph 1—

(a)

after “profits” insert “ chargeable to corporation tax ”, and

(b)

for “his” substitute “ its ”.

(3)

In paragraph 2—

(a)

in sub-paragraph (1) for “he” substitute “ the farmer ”,

(b)

omit sub-paragraphs (3)(a), (4)(a) and (5), and

(c)

in sub-paragraph (6), omit the definitions of “commencement year” and “qualifying year of assessment”.

(4)

In paragraph 3—

(a)

in sub-paragraph (1) after “profits” insert “ chargeable to corporation tax ”,

(b)

in sub-paragraph (3)(b) for “him” substitute “ the farmer ”,

(c)

in sub-paragraph (9)(a) for “his” substitute “ the seller's ”, and

(d)

in sub-paragraph (10)(b) for “him” substitute “ the farmer ”.

(5)

In paragraph 4—

(a)

for “him” substitute “ the farmer ”, and

(b)

for “he” substitute “ the farmer ”.

(6)

In paragraph 5(1) after “profits” insert “ chargeable to corporation tax ”.

(7)

In paragraph 6—

(a)

in sub-paragraph (1)—

(i)

for “his” substitute “ its ”, and

(ii)

for “him” substitute “ the farmer ”,

(b)

omit sub-paragraphs (2)(a), and (3)(a), and

(c)

in sub-paragraph (4), omit the definition of “qualifying year of assessment”.

(8)

In paragraph 8—

(a)

for “him”, in each place it occurs, substitute “ the farmer ”,

(b)

in sub-paragraph (7)—

(i)

before “tax” insert “ corporation ”, and

(ii)

for “chargeable period” substitute “ accounting period ”.

(9)

In paragraph 11 for “chargeable period” substitute “ accounting period ”.

344

Omit Schedule 5AA (guaranteed returns on transactions in futures and options).

345

Omit Schedule 15A (contractual savings schemes).

346

(1)

Amend Schedule 15B (venture capital trusts: relief from income tax) as follows.

(2)

In paragraph 4(1) and (2) omit “under Case VI of Schedule D”.

(3)

Omit paragraphs 7 to 9.

347

(1)

Amend Schedule 20 (charities: qualifying investments and loans) as follows.

(2)

After paragraph 7 insert—

“7A

Uncertificated eligible debt security units as defined in section 552(2) of ITTOIA 2005.”

(3)

In paragraph 8 for “section 56(5)” substitute “ for corporation tax purposes in section 56(5) above and for income tax purposes in section 552(2) of ITTOIA 2005 ”.

348

(1)

Amend Schedule 22 (reduction of pension fund surpluses) as follows.

(2)

In paragraph 7(3)(c) for the words from “section 56” to “that section” substitute “ section 551 of ITTOIA 2005 shall by virtue of section 56(3)(b) of this Act ”.

(3)

After paragraph 7 insert—

“7A

(1)

This paragraph applies if a calculation falls to be made under paragraph 7 above in a case where—

(a)

relief is to be given under section 454 of ITTOIA 2005 (listed deeply discounted securities held since 26th March 2003: relief for losses) in respect of a loss sustained on the disposal of securities, and

(b)

had there been a profit on the disposal it would have been eligible for relief from tax for the year of assessment in which the loss is sustained by virtue of section 592(2).

(2)

That relief is to be given before the calculation under paragraph 7 above is made.

(3)

Then the amount of income to which the specified percentage is applied by virtue of sub-paragraph (3)(a) of that paragraph is reduced by the amount of that relief.

(4)

In this paragraph “disposal” has the same meaning as in Chapter 8 of Part 4 of ITTOIA 2005.”

349

In paragraph 11A(4) of Schedule 24 (assumptions for calculating chargeable profits etc. of foreign companies) after “the Capital Allowances Act” insert “ or section 48 of ITTOIA 2005 ”.

350

(1)

Amend Schedule 27 (distributing funds) as follows.

(2)

F141. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3)

F141. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4)

In paragraph 5(5) after “1996” insert “ or section 714 or 715 of ITTOIA 2005 ”.

351

(1)

Amend Schedule 28AA (provision not at arm's length) as follows.

F142(2)

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3)

In paragraph 6E after “Schedule D” insert “ or Chapter 2 of Part 4 of ITTOIA 2005 ”.

(4)

In paragraph 11(1) after “section 492(1)” insert “ above or section 16(1) of ITTOIA 2005 ”.

352

(1)

Amend Schedule 30 (transitional provisions and savings) as follows.

F143(2)

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3)

Omit paragraphs 18 and 18A.