“(ii)

section 495(1) or 975(2) or (4) of ITA 2007 (statements about deduction of income tax),”.

“87Interest on overdue income tax deducted at source

(1)

Income tax which is assessable under Chapter 15 of Part 15 of ITA 2007 carries interest at the rate applicable under section 178 of the Finance Act 1989 from the date when it was due under section 951 of ITA 2007 until payment.

(2)

Subsection (1) applies—

(a)

whether or not an assessment is made, and

(b)

whether or not income tax which is assessed has been paid when the assessment is made.

(3)

Subsection (1) applies even if the date when the income tax should have been paid is a non-business day as defined by section 92 of the Bills of Exchange Act 1882.

(4)

Subsection (5) applies to any income tax which—

(a)

was payable under Chapter 15 of Part 15 of ITA 2007 (collection: deposit-takers, building societies and certain companies) in respect of payments within section 946 of that Act made in a return period,

(b)

was not paid on the date when it was due under section 951 of that Act, and

(c)

has subsequently been discharged or repaid under section 953 of that Act because the person who made the payments received payments on which it suffered income tax by deduction in a later return period.

(5)

The income tax carries interest under subsection (1) from the date when it was due under section 951 of ITA 2007 until the earliest of—

(a)

the date when the income tax was paid,

(b)

the date when the person delivered a return for the later return period, and

(c)

the expiry of 14 days after the end of that period,

but subsection (1) does not otherwise apply to the income tax.

(6)

In this section “return period” means a period for which a return is required to be made under Chapter 15 of Part 15 of ITA 2007.”

“99BDeclarations under Chapter 2 of Part 15 of ITA 2007

Where a person fraudulently or negligently gives any incorrect information in a declaration under any of sections 858 to 861 of ITA 2007, the person shall be liable to a penalty not exceeding £3,000.”

“11Visiting forces and official agents

(1)

If section 833 of ITA 2007 (visiting forces and staff of designated allied headquarters) applies to an individual throughout a period, the period is not treated for capital gains tax purposes as—

(a)

a period of residence in the United Kingdom, or

(b)

creating a change of the individual's residence or domicile.

(2)

If an individual is entitled to immunity from income tax by virtue of section 841 of ITA 2007 (which provides immunity from income tax for official agents of Commonwealth countries or the Republic of Ireland etc), the individual is entitled to the same immunity from capital gains tax as that to which a member of the staff of a mission is entitled under the Diplomatic Privileges Act 1964.

(3)

“A member of the staff of a mission” is to be read in accordance with the Diplomatic Privileges Act 1964.”

“(5)

If—

(a)

because section 759(4) or (6) of ITA 2007 applies, the person charged to tax under Chapter 3 of Part 13 of that Act (transactions in land) is a person other than the person (“A”) by whom the gain was realised, and

(b)

the income tax has been paid,

for the purposes of this section the amount charged to that tax is regarded as having been charged as the income of A.

(6)

If—

(a)

because section 777(5) of that Act applies, the person charged to tax under Chapter 4 of Part 13 of that Act (sales of occupation income) is a person other than the person (“B”)—

(i)

for whom the capital amount was obtained, or

(ii)

in the case of income treated as arising under section 779 of that Act, by whom the property or right was sold or realised, and

(b)

the income tax has been paid,

for the purposes of this section the amount charged to that tax is regarded as having been charged as the income of B.

(7)

In subsection (6) “capital amount” has the same meaning as in Chapter 4 of Part 13 of that Act (sales of occupation income) (see section 777(7) of that Act).”

“(4)

If—

(a)

because section 759(4) or (6) of ITA 2007 applies, the person charged to tax under Chapter 3 of Part 13 of that Act (transactions in land) is a person other than the person (“A”) by whom the gain was realised, and

(b)

the income tax has been paid,

for the purposes of this section the amount charged to that tax is regarded as having been charged as the income of A.”

“Share loss relief

125AEffect of share loss relief

(1)

If loss relief under section 573 of the Taxes Act or Chapter 6 of Part 4 of ITA 2007 (“share loss relief”) is obtained in respect of a loss or any part of a loss, no deduction is to be made in respect of the loss or (as the case may be) the part under this Act.

(2)

If a claim is made for share loss relief in respect of a loss accruing on the disposal of shares, section 30 has effect in relation to the disposal as if for the references in subsections (1)(b) and (5) to a tax-free benefit there were substituted references to any benefit whether tax-free or not.

(3)

All such adjustments of corporation tax on chargeable gains or capital gains tax are to be made, whether by way of assessment or by way of discharge or repayment of tax, as may be required in consequence of—

(a)

share loss relief being obtained in respect of an allowable loss, or

(b)

such relief not being obtained in respect of the whole or part of such a loss in respect of which a claim is made.”

“151BACITR: identification of securities or shares on a disposal

(1)

This section applies for the purpose of identifying the securities or shares disposed of in any case where—

(a)

an individual or company (“the investor”) disposes of part of a holding of securities or shares (“the holding”), and

(b)

the holding includes securities or shares to which CITR is attributable in respect of one or more years of assessment or accounting periods that have been held by the investor continuously from the time they were issued until the disposal.

(2)

Any disposal by the investor of securities or shares included in the holding which have been acquired by the investor on different days is treated as relating to those acquired on an earlier day rather than to those acquired on a later day.

(3)

If there is a disposal by the investor of securities or shares included in the holding which have been acquired by the investor on the same day, any of those securities or shares—

(a)

to which CITR is attributable, and

(b)

which have been held by the investor continuously from the time they were issued until the time of disposal,

are treated as disposed of after any other securities or shares included in the holding which were acquired by the investor on that day.

(4)

For the purposes of this section a holding of securities is any number of securities of a company which—

(a)

carry the same rights,

(b)

were issued under the same terms, and

(c)

are held by the investor in the same capacity.

It does not matter for this purpose that the number of the securities grows or diminishes as securities carrying those rights and issued under those terms are acquired or disposed of.

(5)

For the purposes of this section a holding of shares is any number of shares in a company which—

(a)

are of the same class, and

(b)

are held by the investor in the same capacity.

It does not matter for this purpose that the number of the shares grows or diminishes as shares of that class are acquired or disposed of.

(6)

Chapter 1 of Part 4 (share pooling, etc) has effect subject to this section.

(7)

Sections 104 to 107 (which make provision for the identification of securities and shares on a disposal) do not apply to securities or shares to which CITR is attributable.

(8)

In a case to which section 127 (equation of original shares and new holding) applies, shares included in the new holding are treated for the purposes of subsections (2) and (3) as acquired when the original shares were acquired.

(9)

In subsection (8)—

(a)

the reference to section 127 includes a reference to that section as it is applied by virtue of any enactment relating to chargeable gains, and

(b)

“original shares” and “new holding” have the same meaning as in section 127, or (as the case may be) that section as applied by virtue of the enactment in question.

(10)

In this section and sections 151BB and 151BC—

(a)

if the investor is an individual—

(i)

“CITR” has the meaning given by section 333 of ITA 2007,

(ii)

references to CITR being attributable to securities, shares or debentures are to be read in accordance with section 357 of that Act, and

(iii)

references to securities, shares or debentures having been held by the investor continuously are to be read in accordance with section 380 of that Act,

(b)

if the investor is a company—

(i)

“CITR” means relief under Part 5 of Schedule 16 to the Finance Act 2002,

(ii)

references to CITR being so attributable are to be read in accordance with paragraph 26 of that Schedule, and

(iii)

references to securities, shares or debentures having been held by the investor continuously are to be read in accordance with paragraph 49 of that Schedule.”

“151BBCITR: rights issues etc

(1)

If—

(a)

an individual or company (“the investor”) holds shares in the CDFI which are of the same class and held in the same capacity (“the existing holding”),

(b)

there is a reorganisation affecting the existing holding as a result of an allotment which—

(i)

falls within section 126(2)(a) (an allotment of shares or debentures in respect of and in proportion to an original holding), and

(ii)

is not an allotment of corresponding bonus shares,

(c)

immediately after the reorganisation, CITR is attributable to the shares included in the existing holding or the shares or debentures allotted in respect of those shares, in respect of one or more years of assessment or accounting periods, and

(d)

if CITR is attributable to the shares included in the existing holding at that time, those shares have been held by the investor continuously from the time they were issued until the reorganisation,

sections 127 to 130 (treatment of share capital following a reorganisation) do not apply in relation to the existing holding.

(2)

Section 116(10) (reorganisations, conversions and reconstructions) does not apply in any case where the old asset consists of shares held (in the same capacity) by the investor—

(a)

that have been held by the investor continuously from the time they were issued until the relevant transaction, and

(b)

to which CITR is attributable immediately before that transaction.

In this subsection “old asset” and “the relevant transaction” have the meaning given by section 116.

(3)

For the purposes of subsection (1)—

“corresponding bonus shares” means bonus shares that—

(a)

are issued in respect of shares included in the existing holding, and

(b)

are in the same company, are of the same class, and carry the same rights as, those shares,

“reorganisation” has the meaning given in section 126.

(4)

The following provisions of this Act have effect subject to this section—

• section 116 (reorganisations, conversions and reconstructions);

• Chapter 2 of Part 4 (reorganisation of share capital, conversion of securities etc).

(5)

In this section “the CDFI” is to be read—

(a)

if the investor is an individual, in accordance with section 334(2) of ITA 2007,

(b)

if the investor is a company, in accordance with paragraph 1(2) of Schedule 16 to the Finance Act 2002.”

“151BCCITR: company reconstructions etc

(1)

If—

(a)

an individual or company (“the investor”) holds shares in or debentures of a company (“company A”),

(b)

there is a reconstruction or amalgamation affecting that holding (“the existing holding”),

(c)

immediately before the reconstruction or amalgamation, CITR is attributable to the shares or debentures included in the existing holding in respect of one or more years of assessment or accounting periods, and

(d)

the shares or debentures included in the existing holding have been held by the investor continuously from the time they were issued until the reconstruction or amalgamation,

sections 135 and 136 (share exchanges and company reconstructions) do not apply in respect of the existing holding.

(2)

Subsection (1)(a) applies only if the shares or debentures are held by the investor in the same capacity.

(3)

For the purposes of subsection (1) a “reconstruction or amalgamation” means an issue by a company of shares in or debentures of that company in exchange for or in respect of shares in or debentures of company A.

(4)

The following provisions of this Act have effect subject to this section—

• section 116 (reorganisations, conversions and reconstructions),

• Chapter 2 of Part 4 (reorganisation of share capital, conversion of securities etc).

(5)

The investor is treated as disposing of any securities or shares which but for subsection (1) the investor—

(a)

would be treated as exchanging for other securities or shares by virtue of section 136, or

(b)

would be so treated but for section 137(1) (which restricts section 136 to genuine reconstructions).”

“(5)

If—

(a)

any person is charged to income tax under section 755 of ITA 2007 (charge to tax from transactions in land) on the realisation of a gain because the condition in section 756(3)(d) is met, and

(b)

the gain is calculated on the basis that any property was appropriated as trading stock,

the property shall be treated on that basis also for the purposes of this section.”

“256AAttributing gains to the non-exempt amount

(1)

This section applies if a charitable trust has a non-exempt amount under section 540 of ITA 2007 for a year of assessment.

(2)

Attributable gains of the charitable trust for the year of assessment may be attributed to the non-exempt amount but only so far as the non-exempt amount has not been used up.

(3)

The non-exempt amount can be used up (in whole or in part) by—

(a)

attributable gains being attributed to it under this section, or

(b)

attributable income being attributed to it under section 541 of ITA 2007.

(4)

The whole of the non-exempt amount must be used up by—

(a)

attributable gains being attributed to the whole of it under this section,

(b)

attributable income being attributed to the whole of it under section 541 of ITA 2007, or

(c)

a combination of attributable gains being attributed to some of it under this section and attributable income being attributed to the rest of it under section 541 of ITA 2007.

(5)

See section 256B for the way in which gains are to be attributed to the non-exempt amount under this section.

(6)

In this section and section 256B a charitable trust's “attributable income”, and “attributable gains”, for a tax year have the same meaning as in Part 10 of ITA 2007 (see section 540 of that Act).

256BHow gains are attributed to the non-exempt amount

(1)

This section is about the ways in which attributable gains can be attributed to a non-exempt amount under section 256A.

(2)

The trustees of the charitable trust may specify the attributable gains that are to be attributed to the non-exempt amount.

(3)

A specification under subsection (2) is made by notice to an officer of Revenue and Customs.

(4)

Subsection (6) applies if—

(a)

an officer of Revenue and Customs requires the trustees of a charitable trust to make a specification under this section, and

(b)

the trustees have not given notice under subsection (3) of the specification before the end of the required period.

(5)

The required period is 30 days beginning with the day on which the officer made the requirement.

(6)

An officer of Revenue and Customs may determine the attributable gains that are to be attributed to the non-exempt amount.”

“(2A)

Subsection (2B) applies if relief is available under Chapter 3 of Part 8 of ITA 2007 or section 587B of the Taxes Act (gifts of shares, securities and real property to charities) in relation to the disposal of a qualifying investment to a charity (whether or not a claim for relief is actually made).

(2B)

The consideration for which the charity's acquisition of the qualifying investment is treated by virtue of subsection (2) above as having been made—

(a)

is reduced by the relievable amount if relief in relation to the disposal is available only under Chapter 3 of Part 8 of ITA 2007,

(b)

is reduced by the relevant amount if relief in relation to the disposal is available only under section 587B of the Taxes Act,

(c)

is reduced by the relievable amount if relief in relation to the disposal is available both under that Chapter and that section as a result of section 442 of ITA 2007 and section 587BA of the Taxes Act, or

(d)

is reduced to nil if that consideration is less than the amount referred to in paragraph (a), (b) or (c) (as the case may be).

(2C)

In subsections (2A) and (2B)—

“qualifying investment” has the same meaning as in Chapter 3 of Part 8 of ITA 2007 (see section 432 of that Act),

“relevant amount” has the same meaning as in section 587B of the Taxes Act, and

“relievable amount” has the same meaning as in Chapter 3 of Part 8 of ITA 2007 (see section 434 of that Act).”

“Deduction of trading losses or post-cessation expenditure etc

261BTreating trade loss etc as CGT loss

(1)

A person may make a claim under this section if—

(a)

relief is available to the person under section 64 or 128 of ITA 2007 (trade or employment loss relief against general income) for a tax year in relation to an amount of loss, and

(b)

the person makes a claim under that section for the amount to be deducted in calculating the person's net income for the tax year.

(2)

A person may also make a claim under this section if—

(a)

relief is available to the person as mentioned in subsection (1)(a) for a tax year in relation to an amount of loss, but

(b)

the person's total income for the tax year is nil or does not include any income from which the amount can be deducted.

(3)

A claim under this section is for determining so much of the amount of the loss (“the relevant amount”) as—

(a)

is not deducted in calculating the person's net income for the tax year, and

(b)

has not already been taken into account for the purposes of any relief for any other tax year or any year of assessment (whether under ITA 2007, this section or otherwise).

(4)

When the relevant amount can no longer be varied—

(a)

by the Commissioners on appeal, or

(b)

on the order of a court,

it is treated for the purposes of capital gains tax as an allowable loss accruing to the person in the year of assessment corresponding to the tax year.

(5)

But so much of the relevant amount as exceeds the maximum amount (see section 261C) is not to be treated for the purposes of capital gains tax as an allowable loss.

(6)

The excess may, however, be used in giving effect to any other loss relief under Part 4 of ITA 2007 (depending on the terms of the relief).

(7)

The amount treated as an allowable loss under this section—

(a)

is no longer to be regarded as an amount available for income tax relief, and

(b)

is not to be deductible from chargeable gains accruing to a person in any year of assessment that begins after the person has permanently ceased to carry on the trade, profession, vocation, employment or office in which the loss was made.

(8)

A claim under this section must be made on or before the first anniversary of the normal self-assessment filing date for the tax year in which the loss was made in the trade, profession, vocation, employment or office.

(9)

In this section “normal self-assessment filing date”, “tax year” and “total income” have the same meaning as in the Income Tax Acts (see section 989 of ITA 2007).

261CMeaning of “the maximum amount” for purposes of section 261B

(1)

For the purposes of section 261B “the maximum amount” is the amount on which the person would be chargeable to capital gains tax for the year of assessment if—

(a)

the provisions mentioned below were ignored, and

(b)

no account were taken of the event mentioned below.

(2)

The provisions are—

(a)

section 2A (taper relief),

(b)

section 3(1) (annual exempt amount), and

(c)

section 261B.

(3)

The event is any event—

(a)

which occurs after the date on which the relevant amount (see section 261B(3)) can no longer be varied by the Commissioners on appeal or on the order of a court, and

(b)

in consequence of which the amount chargeable to capital gains tax is reduced as a result of an enactment relating to capital gains tax.

261DTreating excess post-cessation trade or property relief as CGT loss

(1)

A person may make a claim under this section if—

(a)

relief is available to the person under section 96 or 125 of ITA 2007 (post-cessation trade or property relief) for a tax year in relation to an amount, and

(b)

the person makes a claim under that section to deduct the amount in calculating the person's net income for the tax year.

(2)

A person may also make a claim under this section if—

(a)

relief is available to the person as mentioned in subsection (1)(a) for a tax year in relation to an amount, but

(b)

the person's total income for the tax year is nil.

(3)

A claim under this section is for treating for the purposes of capital gains tax so much of the amount as is not deducted in calculating the person's net income for the tax year (“the relevant amount”) as an allowable loss accruing to the person in the year of assessment corresponding to the tax year.

(4)

But so much of the relevant amount as exceeds the maximum amount (see section 261E) is not to be treated for the purposes of capital gains tax as an allowable loss.

(5)

The relevant amount is no longer to be regarded as an amount available for income tax relief.

(6)

A claim under this section must be made on or before the first anniversary of the normal self-assessment filing date for the tax year mentioned in subsection (1) or (2) (as the case may be).

(7)

In this section “normal self-assessment filing date”, “tax year” and “total income” have the same meaning as in the Income Tax Acts (see section 989 of ITA 2007).

261EMeaning of “the maximum amount” for purposes of section 261D

(1)

For the purposes of section 261D “the maximum amount” is the amount on which the person would be chargeable to capital gains tax for the year of assessment if the following were ignored.

(2)

The matters to be ignored are—

(a)

any allowable losses falling to be carried forward to that year from a previous year for the purposes of section 2(2),

(b)

section 3(1) (annual exempt amount), and

(c)

any relief under section 261B or 261D.”

“Repurchase price under repos

261FDeemed manufactured payments: effect on repurchase price

(1)

This section applies if —

(a)

the repurchase price of UK shares, UK securities or overseas securities is treated by section 604(2), (4) or (5) of ITA 2007 (deemed increase in repurchase price: repos and options) as increased for the purposes of section 607 of that Act (treatment of price differences under repos),

(b)

condition A or B is met, and

(c)

section 263A does not apply.

(2)

Condition A is that, as a result of the increase, there is no difference for the purposes of section 607 of that Act between the sale price and the repurchase price.

(3)

Condition B is that, as a result of an exception in section 608 of that Act, section 607 of that Act does not apply.

(4)

The deemed increase of the repurchase price also has effect for capital gains tax purposes.

(5)

Expressions used in this section and in section 605 of ITA 2007 (deemed increase in repurchase price: other income tax purposes) have the same meanings in this section as in that section.”

“261GPrice differences under repos: effect on repurchase price

(1)

Subsections (2) and (3) apply if—

(a)

section 607 of ITA 2007 (treatment of price differences under repos) applies,

(b)

an amount is treated under that section as a payment of interest, and

(c)

section 263A does not apply.

(2)

If the repurchase price is more than the sale price, the repurchase price is treated for capital gains tax purposes as reduced by the amount of the payment of interest.

(3)

If the sale price is more than the repurchase price, the repurchase price is treated for capital gains tax purposes as increased by the amount of the payment of interest.

(4)

Expressions used in this section and in section 609 of ITA 2007 (additional income tax consequences of price differences under repos) have the same meanings in this section as in that section.”

“261HPower to modify section 261G in non-arm's length case

(1)

The Treasury may by regulations provide for section 261G to apply with modifications if the exception in section 608(2) of ITA 2007 (agreement not at arm's length) would otherwise prevent it from applying.

(2)

Regulations under this section may make different provision for different cases.

(3)

Regulations under this section may contain incidental, supplemental, consequential and transitional provision and savings.

(4)

The incidental, supplemental, and consequential provision may include modifications of section 261F (deemed manufactured payments: effect on repurchase price).

(5)

In this section “modifications” includes exceptions and omissions.

(6)

Accordingly, the power in subsection (1) includes power to provide for any provision of section 261G not to apply in relation to the case mentioned in that subsection.”

“263FPower to modify repo provisions: non-standard repo cases

(1)

The Treasury may by regulations provide for—

(a)

section 261F (deemed manufactured payments: effect on repurchase price),

(b)

section 261G (price differences under repos: effect on repurchase price),

(c)

section 263A (agreements for sale and repurchase of securities),

(d)

section 263D (gains accruing to persons paying manufactured dividends), or

(e)

any of those sections,

to apply with modifications in relation to non-standard repo cases.

(2)

The power in subsection (1) to make provision for section 263A or 263D to apply with modifications is exercisable only so far as the section applies to cases falling within section 607 of ITA 2007 (treatment of price differences under repos).

(3)

A case is a non-standard repo case if—

(a)

there is a repo in respect of securities,

(b)

under the repo there has been a sale (“the original sale”) of the securities by the original owner to the interim holder, and

(c)

any of conditions A to E is met in relation to the repo.

(4)

Condition A is that—

(a)

the obligation to buy back the securities is not performed, or

(b)

the option to buy them back is not exercised.

(5)

Condition B is that provision is made by or under an agreement for different or additional UK shares, UK securities or overseas securities to be treated as (or as included with) representative securities.

(6)

Condition C is that provision is made by or under an agreement for any UK shares, UK securities or overseas securities to be treated as not included with representative securities.

(7)

Condition D is that provision is made by or under an agreement for the sale price or repurchase price to be decided or varied wholly or partly by reference to post-agreement fluctuations.

(8)

Condition E is that provision is made by or under an agreement for a person to be required, in a case where there are post-agreement fluctuations, to make a payment in the period—

(a)

beginning immediately after the making of the agreement for the original sale, and

(b)

ending when the repurchase price becomes due.

(9)

Expressions used in this section and in section 612 of ITA 2007 (powers to modify repo provisions: non-standard repo cases) have the same meanings in this section as in that section.”

“263GPower to modify repo provisions: redemption arrangements

(1)

The Treasury may by regulations provide for—

(a)

section 261F (deemed manufactured payments: effect on repurchase price),

(b)

section 261G (price differences under repos: effect on repurchase price),

(c)

section 263A (agreements for sale and repurchase of securities),

(d)

section 263D (gains accruing to persons paying manufactured dividends), or

(e)

any of those sections,

to apply with modifications in relation to cases involving redemption arrangements.

(2)

The power in subsection (1) to make provision for section 263A or 263D to apply with modifications is exercisable only so far as the section applies to cases falling within section 607 of ITA 2007 (treatment of price differences under repos).

(3)

A case involves redemption arrangements if—

(a)

arrangements, corresponding to those made in cases where there is a repo, are made by an agreement, or one or more related agreements, in relation to securities that are to be redeemed in the period after their sale,

(b)

the securities are UK shares, UK securities or overseas securities, and

(c)

the arrangements are such that the seller or a person connected with the seller (instead of being required to repurchase the securities or acquiring an option to do so) is granted rights in respect of the benefits that will result from the redemption.

(4)

Expressions used in this section and in section 613 of ITA 2007 (powers to modify repo provisions: redemption arrangements) have the same meanings in this section as in that section.”

“263HSections 263F and 263G: supplementary provisions

(1)

Regulations under section 263F or 263G may make different provision for different cases.

(2)

Regulations under either section may contain incidental, supplemental, consequential and transitional provision and savings.

(3)

The incidental, supplemental and consequential provision may include—

(a)

in the case of regulations about section 261G, modifications of section 261F, and

(b)

in the case of regulations about section 263A or 263D, modifications of the operation of this Act in relation to cases where, by virtue of the regulations, any acquisition or disposal is excluded from those which are to be ignored for the purposes of capital gains tax.

(4)

In this section and sections 263F and 263G “modifications” includes exceptions and omissions.

(5)

Accordingly, a power in sections 263F and 263G to provide for a provision to apply with modifications in relation to a particular case includes power to provide for the provision not to apply in relation to that case.”

“263IPowers about manufactured overseas dividends

(1)

The Treasury may by regulations make provision as mentioned in subsection (2) about prescribed cases where a person—

(a)

pays or receives a manufactured overseas dividend as mentioned in section 581(1) of ITA 2007 (manufactured overseas dividends), or

(b)

is treated as doing so for any purposes of Chapter 2 of Part 11 of that Act or regulations made under it (manufactured payments).

(2)

The regulations may provide for adjusting a relevant amount by reference to a provision which has effect under the law of a territory outside the United Kingdom.

(3)

A “relevant amount” is an amount which is treated for prescribed capital gains tax purposes as the amount paid or payable to a person in respect of a relevant transaction.

(4)

A “relevant transaction” is a sale, repurchase or other transfer of the overseas securities to which the manufactured overseas dividend relates.

(5)

In this section “prescribed” means prescribed in regulations under this section.

(6)

Subject to that, expressions used in this section and in section 582 of ITA 2007 (manufactured payments: powers about manufactured overseas dividends) have the same meanings in this section as in that section.”

“285AEuropean Economic Interest Groupings

(1)

The following rules about European Economic Interest Groupings apply for the purposes of charging tax in respect of chargeable gains—

Rule 1

A grouping is treated as acting as the agent of its members.

Rule 2

The activities of a grouping are treated as those of its members acting jointly.

Rule 3

Each member of a grouping is treated as having a share of the grouping's property, rights and liabilities.

Rule 4

Any trade or profession carried on by the grouping is treated as carried on in partnership by members of the grouping.

Rule 5

A person is to be regarded as acquiring or disposing of a share of the assets of the grouping not only where there is an acquisition or disposal of assets by the grouping while he is a member of it, but also where he becomes or ceases to be a member of a grouping or there is a change in his share of the property of the grouping.

(2)

For the purposes of Rule 3, a member's share of any property, rights or liabilities of a grouping is determined according to the contract under which the grouping is established.

(3)

If the contract does not provide for this, the member's share is determined by reference to the share of the profits of the grouping to which the member is entitled under the contract.

(4)

If the contract does not provide for this either, the members are treated as having equal shares of the property, rights and liabilities of the grouping.

(5)

“European Economic Interest Grouping” means a European Economic Interest Grouping formed under Council Regulation (EEC) No 2137/85 of 25th July 1985, whether registered in Great Britain, Northern Ireland or elsewhere.”

“(5A)

This section applies if—

(a)

in a year of assessment qualifying income arises under a UK settlement,

(b)

the qualifying income consists of charitable income and non-charitable income, and

(c)

expenses of the trustees are to be used to reduce the charitable income for the purpose of calculating a beneficiary's liability to corporation tax.

(5B)

The amount of those expenses which can used for that purpose is limited to the amount allocated to the charitable income.

(5C)

The amount of the expenses allocated to the charitable income is determined by apportioning them rateably between the charitable income and the non-charitable income.

(5D)

In this section—

“charitable income” means income within section 628(1) or 630(1) of ITTOIA 2005,

“non-charitable income” means income which is not charitable income, and

“qualifying income” and “UK settlement” have the same meaning as in section 628 of ITTOIA 2005.”

“(3)

In this paragraph “tax advantage” has the meaning given by section 840ZA of the Taxes Act 1988.”

“(3A)

The allowance or (as the case may be) the proportionate part of the allowance is given effect at Step 2 of the calculation in section 23 of ITA 2007.”

“(2)

In this Part “research and development”—

(a)

means activities that fall to be treated as research and development in accordance with generally accepted accounting practice, and

(b)

includes oil and gas exploration and appraisal.

(3)

But—

(a)

activities that, as a result of regulations made under section 1006 of ITA 2007, are “research and development” for the purposes of that section are also “research and development” for the purposes of this Part, and

(b)

activities that, as a result of any such regulations, are not “research and development” for the purposes of that section are also not “research and development” for the purposes of this Part.”

“(2A)

The allowance is given effect at Step 2 of the calculation in section 23 of ITA 2007.”

“Orders and regulations

570BOrders and regulations made by Treasury or Commissioners

(1)

Any orders or regulations made by the Treasury or the Commissioners for Her Majesty's Revenue and Customs under this Act must be made by statutory instrument.

(2)

Any orders or regulations made by the Treasury or the Commissioners under this Act are subject to annulment in pursuance of a resolution of the House of Commons.

(3)

Subsection (2) does not apply to any regulations made under section 70YJ or any order made under section 82(4)(d).”

“575Meaning of “connected” persons

(1)

For the purposes of this Act whether a person is connected with another is determined in accordance with this section unless otherwise indicated.

(2)

An individual (“A”) is connected with another individual (“B”) if—

(a)

A is B's spouse or civil partner,

(b)

A is a relative of B,

(c)

A is the spouse or civil partner of a relative of B,

(d)

A is a relative of B's spouse or civil partner, or

(e)

A is the spouse or civil partner of a relative of B's spouse or civil partner.

(3)

A person, in the capacity as trustee of a settlement, is connected with—

(a)

any individual who is a settlor in relation to the settlement,

(b)

any person connected with such an individual,

(c)

any close company whose participators include the trustees of the settlement,

(d)

any non-UK resident company which, if it were UK resident, would be a close company whose participators include the trustees of the settlement,

(e)

any body corporate controlled (within the meaning of section 574) by a company within paragraph or ,

(f)

if the settlement is the principal settlement in relation to one or more sub-fund settlements, a person in the capacity as trustee of such a sub-fund settlement, and

(g)

if the settlement is a sub-fund settlement in relation to a principal settlement, a person in the capacity as trustee of any other sub-fund settlements in relation to the principal settlement.

(4)

A person who is a partner in a partnership is connected with—

(a)

any partner in the partnership,

(b)

the spouse or civil partner of any individual who is a partner in the partnership, and

(c)

a relative of any individual who is a partner in the partnership.

But this subsection does not apply in relation to acquisitions or disposals of assets of the partnership pursuant to genuine commercial arrangements.

(5)

A company is connected with another company if—

(a)

the same person has control of both companies,

(b)

a person (“A”) has control of one company and persons connected with A have control of the other company,

(c)

A has control of one company and A together with persons connected with A have control of the other company, or

(d)

a group of two or more persons has control of both companies and the groups either consist of the same persons or could be so regarded if (in one or more cases) a member of either group were replaced by a person with whom the member is connected.

(6)

A company is connected with another person (“A”) if—

(a)

A has control of the company, or

(b)

A together with persons connected with A have control of the company.

(7)

In relation to a company, any two or more persons acting together to secure or exercise control of the company are connected with—

(a)

one another, and

(b)

any person acting on the directions of any of them to secure or exercise control of the company.

575ASection 575: supplementary

(1)

In section 575 and this section—

“company” includes any body corporate or unincorporated association, but does not include a partnership (and see also subsection (2)),

“control” is to be read in accordance with section 416 of ICTA (except where otherwise indicated),

“principal settlement” has the meaning given by paragraph 1 of Schedule 4ZA to TCGA 1992,

“relative” means brother, sister, ancestor or lineal descendant,

“settlement” has the same meaning as in Chapter 5 of Part 5 of ITTOIA 2005 (see section 620 of that Act), and

“sub-fund settlement” has the meaning given by paragraph 1 of Schedule 4ZA to TCGA 1992.

(2)

For the purposes of section 575—

(a)

a unit trust scheme is treated as if it were a company, and

(b)

the rights of the unit holders are treated as if they were shares in the company.

(3)

For the purposes of section 575 “trustee”, in the case of a settlement in relation to which there would be no trustees apart from this subsection, means any person—

(a)

in whom the property comprised in the settlement is for the time being vested, or

(b)

in whom the management of that property is for the time being vested.

Section 466(4) of ITA 2007 does not apply for the purposes of this subsection.

(4)

If any provision of section 575 provides that a person (“A”) is connected with another person (“B”), it also follows that B is connected with A.”

“(2)

For the purposes of this Schedule whether a person is connected with another is determined in accordance with section 839 of the Taxes Act 1988.”

“(2)

For the purposes of this Schedule whether a person is connected with another is determined in accordance with section 839 of the Taxes Act 1988.”

“404AAmounts charged to be treated as highest part of total income

(1)

A payment or other benefit which counts as a person's employment income as a result of section 403 is treated as the highest part of the person's total income.

(2)

Subsection (1) has effect for all income tax purposes except the purposes of sections 535 to 537 of ITTOIA 2005 (gains from contracts for life insurance etc: top slicing relief).

(3)

See section 1012 of ITA 2007 (relationship between highest part rules) for the relationship between—

(a)

the rule in subsection (1), and

(b)

other rules requiring particular income to be treated as the highest part of a person's total income.”

“(5A)

An amount charged under subsection (5)(a) is treated for income tax purposes as an amount of income.”