2018 No. 459
The Scottish Rates of Income Tax (Consequential Amendments) Order 2018
Made
Coming into force in accordance with article 1
A draft of this Order was laid before and approved by the House of Commons in accordance with paragraphs 1 and 2 of Schedule 7 to the Scotland Act 19981.
The Treasury, in exercise of the powers conferred by section 80G(1A) and (2) of the Scotland Act 19982, makes the following Order:
Citation, commencement and effect1
1
This Order may be cited as the Scottish Rates of Income Tax (Consequential Amendments) Order 2018 and comes into force on the day after the day on which it is made.
2
The amendments made by this Order have effect in relation to the tax year commencing on 6th April 2018 and subsequent tax years.
Amendments to the Taxes Management Act 19702
1
The Taxes Management Act 19703 is amended as follows.
2
In section 7(6)4 (notice of liability to income tax and capital gains tax), after “the Scottish basic rate,” insert “a Scottish rate below the Scottish basic rate, the Scottish intermediate rate,”.
3
In section 91(3)(c)5 (effect on interest of reliefs), after “the basic rate,” insert “the Scottish basic rate, a Scottish rate below the Scottish basic rate, the Scottish intermediate rate,”.
Amendment to the Finance Act 20043
1
Section 192 (relief at source) of the Finance Act 20046 is amended as follows.
2
In subsection (4A), after “in the individual’s case” insert “that is above the Scottish basic rate limit”.
Amendment to the Income Tax (Trading and Other Income) Act 20054
1
Section 669 (reduction in residuary income: inheritance tax on accrued income) of the Income Tax (Trading and Other Income) Act 20057 is amended as follows.
2
In subsection (3A)(c)8 for “any Scottish rate above the Scottish basic rate” substitute—
any Scottish rate that—
i
is above the Scottish basic rate, but
ii
is not the Scottish intermediate rate
Amendments to the Finance (No. 2) Act 20055
1
Section 7 of the Finance (No. 2) Act 20059 is amended as follows.
2
In subsection (5A)10 (charge to income tax on lump sum)—
a
omit paragraph (b), and
b
in paragraph (c)—
i
for “exceeds the Scottish basic rate limit for that year” substitute “is greater than nil”, and
ii
for “applicable to P” substitute “applicable to P’s Step 3 income for that year”.
Amendments to the Income Tax Act 20076
1
The Income Tax Act 200711 is amended as follows.
2
3
In section 58(2)14 (meaning of “adjusted net income”), omit the words after “by reference to the basic rate for the tax year”.
4
In section 414(2)15 (gift aid: relief for gifts to charity) —
a
in paragraph (a), for the words after “deduction of” substitute “income tax at the basic rate, and”, and
b
in paragraph (b) for “the Scottish basic rate limit and any other Scottish rate limit,” substitute “the upper limit for the Scottish basic rate and the limits for any Scottish rates above the Scottish basic rate,”.
5
In section 41516 (gift aid: meaning of “grossed up amount”) omit the words after “by reference to the basic rate for the tax year in which the gift is made”.
6
In section 74517 (rates of tax applicable to income charged under sections 720 and 727 etc)—
a
after subsection (1) insert—
1A
Income tax at a Scottish rate above 0% and below, or equal to, the basic rate is not charged under section 720 or 727 in respect of any income if (and to the corresponding extent that) the income mentioned in section 721(2) or 728(1)(a) has borne tax at the basic rate.
b
in subsection (2) for “Subsection (1) does” substitute “Subsections (1) and (1A) do”, and
c
in subsection (3) for “subsection (1) does not apply” substitute “neither of subsections (1) and (1A) applies”.
7
In section 828B(5)18 (conditions to be met)—
a
before “the Scottish basic rate” insert “a Scottish rate below the Scottish basic rate,”, and
b
after “the Scottish basic rate” insert “, the Scottish intermediate rate”.
8
In section 98919 (definitions for the purposes of the Income Tax Acts), before the definition of “Scottish rate” insert—
“Scottish intermediate rate”, in relation to a tax year, means any Scottish rate for that year which is named “intermediate” by the Scottish rate resolution setting it,
9
In Schedule 420 (index of defined expressions), before the definition of “Scottish rate” insert—
Scottish intermediate rate section 989
Amendment to the Finance Act 20167
1
The Finance Act 201621 is amended as follows.
2
Omit section 6(17) to (19) (structure of income tax rates).
Amendment to the Scottish Rate of Income Tax (Consequential Amendments) Order 20158
1
The Scottish Rate of Income Tax (Consequential Amendments) Order 201522 is amended as follows.
2
Omit article 14(5) to (7) (amendments to the Income Tax Act 2007).
(This note is not part of the Order)