Income Tax Act 2007
 

Income Tax Act 2007

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Income Tax Act 2007 List of acts
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CONTENTS

Income Tax Act 2007

2007 CHAPTER 3

Part 1

Overview

1. Overview of Income Tax Acts

2. Overview of Act

Part 2

Basic provisions

Chapter 1

Charges to income tax

3. Overview of charges to income tax

4. Income tax an annual tax

5. Income tax and companies

Chapter 2

Rates at which income tax is charged

The rates

6. The starting rate, basic rate and higher rate

7. The savings rate

8. The dividend ordinary rate and dividend upper rate

9. The trust rate and dividend trust rate

Income charged at particular rates

10. Income charged at the starting, basic and higher rates: individuals

11. Income charged at the basic rate: other persons

12. Income charged at the savings rate

13. Income charged at the dividend ordinary and dividend upper rates: individuals

14. Income charged at the dividend ordinary rate: other persons

15. Income charged at the trust rate and the dividend trust rate

16. Savings and dividend income to be treated as highest part of total income

17. Repayment: tax paid at basic rate instead of starting or savings rate

18. Meaning of “savings income”

19. Meaning of “dividend income”

Starting rate limit and basic rate limit

20. The starting rate limit and the basic rate limit

21. Indexation of the starting rate limit and the basic rate limit

Chapter 3

Calculation of income tax liability

22. Overview of Chapter

23. The calculation of income tax liability

24. Reliefs deductible at Step 2

25. Reliefs and allowances deductible at Steps 2 and 3: supplementary

26. Tax reductions

27. Order of deducting tax reductions: individuals

28. Order of deducting tax reductions: other persons

29. Tax reductions: supplementary

30. Additional tax

31. Total income: supplementary

32. Liability not dealt with in the calculation

Part 3

Personal reliefs

Chapter 1

Introduction

33. Overview of Part

Chapter 2

Personal allowance and blind person’s allowance

Introduction

34. Allowances under Chapter

Personal allowances

35. Personal allowance for those aged under 65

36. Personal allowance for those aged 65 to 74

37. Personal allowance for those aged 75 and over

Blind person’s allowance

38. Blind person’s allowance

39. Transfer of part of blind person’s allowance to a spouse or civil partner

40. Election for transfer of allowance under section 39

Supplementary

41. Allowances in year of death

Chapter 3

Tax reductions for married couples and civil partners

Introduction

42. Tax reductions under Chapter

43. Meaning of “the minimum amount”

44. Election for new rules to apply

Married couple’s allowance

45. Marriages before 5 December 2005

46. Marriages and civil partnerships on or after 5 December 2005

Elections to transfer relief

47. Election by individual to transfer relief under section 45 or 46

48. Joint election to transfer relief under section 45 or 46

49. Election for partial transfer back of relief

50. Procedure for making and withdrawing elections under sections 47 to 49

Transfer of unused relief

51. Transfer of unused relief

52. Transfer back of unused relief

53. Transfer of unused relief: general

Supplementary

54. Tax reductions in the year of marriage or entry into civil partnership

55. Sections 45 to 53: supplementary

Chapter 4

General

56. Residence etc of claimants

57. Indexation of allowances

58. Meaning of “adjusted net income”

Part 4

Loss relief

Chapter 1

Introduction

59. Overview of Part

Chapter 2

Trade losses

Introduction

60. Overview of Chapter

61. Non-partners: losses of a tax year

62. Partners: losses of a tax year etc

63. Prohibition against double counting

Trade loss relief against general income

64. Deduction of losses from general income

65. How relief works

Restriction on relief for uncommercial trades

66. Restriction on relief unless trade is commercial

Restriction on relief for “hobby” farming or market gardening

67. Restriction on relief in case of farming or market gardening

68. Reasonable expectation of profit

69. Whether trade is the same trade

70. Determining losses in previous tax years

Use of trading loss as CGT loss

71. Treating trade losses as CGT losses

Early trade losses relief

72. Relief for individuals for losses in first 4 years of trade

73. How relief works

74. Restrictions on relief unless trade is commercial etc

Restrictions on sideways relief for certain capital allowances

75. Trade leasing allowances given to individuals

76. First-year allowances: introduction

77. First-year allowances: partnerships with companies

78. First-year allowances: arrangements to reduce tax liabilities

79. Capital allowances restrictions: supplementary

Restriction on sideways relief for specific trades

80. Ring fence income

81. Dealings in commodity futures

82. Exploitation of films

Carry-forward trade loss relief

83. Carry forward against subsequent trade profits

84. How relief works

85. Use of trade-related interest and dividends if trade profits insufficient

86. Trade transferred to a company

87. Ring fence trades

88. Carry forward of certain interest as loss

Terminal trade loss relief

89. Carry back of losses on a permanent cessation of a trade

90. Losses that are “terminal losses”

91. How relief works

92. Use of trade-related interest and dividends if trade profits insufficient

93. Mineral extraction trade and carry back of balancing allowances

94. Carry back of certain interest as loss

Wholly foreign trades

95. Foreign trades etc: reliefs only against foreign income

Post-cessation trade relief

96. Post-cessation trade relief

97. Meaning of “qualifying payment”

98. Meaning of “qualifying event” etc

99. Reduction of relief for unpaid trade expenses

100. Prohibition against double counting

101. Treating excess post-cessation trade relief as CGT loss

Chapter 3

Restrictions on trade loss relief for certain partners

Introduction

102. Overview of Chapter

103. Meaning of “sideways relief”, “capital gains relief” and “firm”

Limited partners

104. Restriction on reliefs for limited partners

105. Meaning of “contribution to the firm”

106. Meaning of “limited partner”

Members of LLPs

107. Restriction on reliefs for members of LLPs

108. Meaning of “contribution to the LLP”

109. Unrelieved losses brought forward

Non-active members of LLPs or other partnerships (apart from limited partnerships)

110. Restriction on reliefs for non-active partners in early tax years

111. Meaning of “contribution to the firm”

112. Meaning of “non-active partner” and “early tax year” etc

113. Unrelieved losses brought forward

Regulations

114. Exclusion of amounts in calculating contribution to the firm or LLP

Restrictions for film trades carried on in partnership

115. Restrictions on reliefs for firms exploiting films

116. Exclusion from restrictions under section 115: certain film expenditure

Chapter 4

Losses from property businesses

Introduction

117. Overview of Chapter

Carry-forward property loss relief

118. Carry forward against subsequent property business profits

119. How relief works

Property loss relief against general income

120. Deduction of property losses from general income

121. How relief works

122. Meaning of “the applicable amount of the loss”

123. Meaning of “the loss has a capital allowances connection” and “the business has a relevant agricultural connection”

124. Supplementary

Post-cessation property relief

125. Post-cessation property relief

126. Treating excess post-cessation property relief as CGT loss

Furnished holiday accommodation

127. UK furnished holiday lettings business treated as trade

Chapter 5

Losses in an employment or office

128. Employment loss relief against general income

129. How relief works

130. Treating loss in employment or office as CGT loss

Chapter 6

Losses on disposal of shares

Share loss relief against general income

131. Share loss relief

132. Entitlement to claim

133. How relief works

Shares to which EIS relief is not attributable

134. Qualifying trading companies

135. Subscriptions for shares

136. Disposals of new shares

Qualifying trading companies: the requirements

137. The trading requirement

138. Ceasing to meet trading requirement because of administration or receivership

139. The control and independence requirement

140. The qualifying subsidiaries requirement

141. The property managing subsidiaries requirement

142. The gross assets requirement

143. The unquoted status requirement

144. Power to amend requirements by Treasury order

Qualifying trading companies: supplementary

145. Relief after an exchange of shares for shares in another company

146. Substitution of new shares for old shares

Limits on share loss relief and mixed holdings

147. Limits on share loss relief

148. Disposal of shares forming part of mixed holding

149. Section 148: supplementary

Miscellaneous and supplementary

150. Deemed time of issue for certain shares

151. Interpretation of Chapter

Chapter 7

Losses from miscellaneous transactions

Loss relief against miscellaneous income

152. Losses from miscellaneous transactions

153. How relief works

Deposit rights

154. Transactions in deposit rights

Supplementary

155. Time limit for claiming relief

Part 5

Enterprise investment scheme

Chapter 1

Introduction

EIS relief

156. Meaning of “EIS relief” and commencement

157. Eligibility for EIS relief

158. Form and amount of EIS relief

Miscellaneous

159. Periods A, B and C

160. Overview of other Chapters of Part

161. Other tax reliefs relating to EIS

Chapter 2

The investor

Introduction

162. Overview of Chapter

The requirements

163. The no connection with the issuing company requirement

164. The no linked loans requirement

165. The no tax avoidance requirement

Meaning of connection with issuing company

166. Connection with issuing company

167. Employees, directors and partners

168. Directors excluded from connection

169. Directors qualifying for relief despite connection

170. Persons interested in capital etc of company

171. Persons subscribing for shares under certain arrangements

Chapter 3

General requirements

Introduction

172. Overview of Chapter

The requirements

173. The shares requirement

174. The purpose of the issue requirement

175. The use of the money raised requirement

176. The minimum period requirement

177. The no pre-arranged exits requirement

178. The no tax avoidance requirement

Meaning of “qualifying business activity”

179. Meaning of “qualifying business activity”

Chapter 4

The issuing company

Introduction

180. Overview of Chapter

The requirements

181. The trading requirement

182. Ceasing to meet trading requirement because of administration or receivership

183. The issuing company to carry on the qualifying business activity requirement

184. The unquoted status requirement

185. The control and independence requirement

186. The gross assets requirement

187. The qualifying subsidiaries requirement

188. The property managing subsidiaries requirement

Definitions

189. Meaning of “qualifying trade”

190. Meaning of “qualifying 90% subsidiary”

191. Meaning of “qualifying subsidiary”

Excluded activities

192. Meaning of “excluded activities”

193. Excluded activities: wholesale and retail distribution

194. Excluded activities: leasing of ships

195. Excluded activities: receipt of royalties and licence fees

196. Excluded activities: property development

197. Excluded activities: hotels and comparable establishments

198. Excluded activities: nursing homes and residential care homes

199. Excluded activities: provision of services or facilities for another business

Supplementary

200. Power to amend by Treasury order

Chapter 5

Attribution of and claims for EIS relief

Attribution

201. Attribution of EIS relief to shares

Claims: general

202. Time for making claims for EIS relief

203. Entitlement to claim

Claims: supporting documents

204. Compliance certificates

205. Compliance statements

206. Appeal against refusal to authorise compliance certificate

207. Penalties for fraudulent certificate or statement etc

Chapter 6

Withdrawal or reduction of EIS relief

Introduction

208. Overview of Chapter

Disposals

209. Disposal of shares

210. Cases where maximum EIS relief not obtained

211. Call options

212. Put options

Value received by investor

213. Value received by the investor

214. Value received: receipts of insignificant value

215. Meaning of “receipts of insignificant value”

216. When value is received

217. The amount of value received

218. Value received where there is more than one issue of shares

219. Value received where part of share issue treated as made in previous tax year

220. Cases where maximum EIS relief not obtained

221. Receipts of value by and from connected persons etc

222. Receipt of replacement value

223. Section 222: supplementary

Repayments etc of share capital to other persons

224. Repayments etc of share capital to other persons

225. Insignificant repayments ignored for purposes of section 224

226. Amount of repayments etc where there is more than one issue of shares

227. Single issue affecting more than one individual

228. Single issue treated as made partly in previous tax year

229. Maximum relief not obtained for share issue

230. Repayment of authorised minimum within 12 months

231. Restriction on withdrawal of relief under section 224

Miscellaneous

232. Acquisition of a trade or trading assets

233. Acquisition of share capital

234. Relief subsequently found not to have been due

Chapter 7

Withdrawal or reduction of EIS relief: procedure

Assessments and appeals

235. Assessments for the withdrawal or reduction of EIS relief

236. Appeals against section 234(3)(b) notices

237. Time limits for assessments

238. Cases where assessment not to be made

Interest

239. Date from which interest is chargeable

Information

240. Information to be provided by the investor

241. Information to be provided by the issuing company etc

242. Power to require information where section 240 or 241 applies or could have applied

243. Power to require information in other cases

244. Obligations of secrecy

Chapter 8

Supplementary and general

Disposals of shares

245. Transfers between spouses or civil partners

246. Identification of shares on a disposal

Acquisition of issuing company

247. Continuity of EIS relief where issuing company is acquired by new company

248. Carry over of obligations etc where EIS relief attributed to new shares

249. Substitution of new shares for old shares

Nominees etc

250. Nominees and bare trustees

251. Approved investment fund as nominee

Interpretation

252. Meaning of a company being “in administration” or “in receivership”

253. Meaning of “associate”

254. Meaning of “disposal of shares”

255. Meaning of “issue of shares”

256. Meaning of “the termination date”

257. Minor definitions etc

Part 6

Venture capital trusts

Chapter 1

Introduction

258. Overview of Part

259. Venture capital trusts and VCT approvals

260. Other tax reliefs relating to VCTs

Chapter 2

VCT relief

Entitlement to relief

261. Eligibility for relief

262. Entitlement to claim relief

263. Form and amount of relief

264. No entitlement to relief if there is a linked loan

265. No entitlement to relief which would have been lost if it had already been obtained

Loss of relief

266. Loss of relief if shares disposed of within 5 years

267. Transfers of shares between spouses or civil partners

268. Loss of relief if VCT approval withdrawn

269. Loss of relief which is subsequently found not to have been due

270. Assessment on withdrawal or reduction of relief

Supplementary

271. Provision of information

272. Regulations as to procedure etc

273. Interpretation of Chapter

Chapter 3

VCT approvals

Giving of approval

274. Requirements for the giving of approval

275. Alternative requirements for the giving of approval

276. Conditions relating to income

277. The 15% holding limit condition

278. Conditions relating to value of investments: general

279. Conditions relating to value of investments: qualifying holdings

280. Conditions relating to qualifying holdings and eligible shares

Withdrawal of approval

281. Withdrawal of VCT approval of a company

282. Withdrawal of VCT approval in cases for which provision made under section 280(3)

Supplementary

283. Time as from which VCT approval has effect

284. Power to make regulations as to procedure

285. Interpretation of Chapter

Chapter 4

Qualifying holdings

Introduction

286. Qualifying holdings: introduction

The requirements

287. The maximum qualifying investment requirement

288. The no guaranteed loan requirement

289. The proportion of eligible shares requirement

290. The trading requirement

291. The carrying on of a qualifying activity requirement

292. Ceasing to meet requirements because of administration or receivership

293. The use of the money raised requirement

294. The relevant company to carry on the relevant qualifying activity requirement

295. The unquoted status requirement

296. The control and independence requirement

297. The gross assets requirement

298. The qualifying subsidiaries requirement

299. The property managing subsidiaries requirement

Definitions

300. Meaning of “qualifying trade”

301. Meaning of “qualifying 90% subsidiary”

302. Meaning of “qualifying subsidiary”

Excluded activities

303. Meaning of “excluded activities”

304. Excluded activities: wholesale and retail distribution

305. Excluded activities: leasing of ships

306. Excluded activities: receipt of royalties and licence fees

307. Excluded activities: property development

308. Excluded activities: hotels and comparable establishments

309. Excluded activities: nursing homes and residential care homes

310. Excluded activities: provision of services or facilities for another business

Supplementary

311. Power to amend Chapter

312. Winding up of the relevant company

313. Interpretation of Chapter

Chapter 5

Powers: winding up and mergers of VCTs

Winding up

314. Power to treat VCT-in-liquidation as VCT

315. Power to treat conditions for VCT approval as met with respect to VCT-in-liquidation

316. Power to make provision about distributions by VCT-in-liquidation

317. Power to facilitate disposal to VCT by VCT-in-liquidation

318. Power in respect of periods before and after winding up

319. Sections 314 to 318: supplementary

320. Meaning of “VCT-in-liquidation”

Mergers

321. Power to facilitate mergers of VCTs

322. Provision that may be made by regulations under section 321

323. Meaning of “merger” and “successor company”

Supplementary

324. Regulations under Chapter

325. Interpretation of Chapter

Chapter 6

Supplementary and general

Acquisitions for restructuring purposes

326. Restructuring to which section 327 applies

327. Certain requirements of Chapter 4 to be treated as met

328. Supplementary

Conversion of shares etc and company reorganisations

329. Conversion of convertible shares and securities

330. Power to facilitate company reorganisations etc involving exchange of shares

Supplementary

331. Meaning of a company being “in administration” or “in receivership”

332. Minor definitions etc

Part 7

Community investment tax relief

Chapter 1

Introduction

CITR

333. Meaning of “CITR”

334. Eligibility for CITR

335. Form and amount of CITR

Miscellaneous

336. Meaning of “making an investment”

337. Determination of “the invested amount”

338. Meaning of “the 5 year period” and “the investment date”

339. Overview of other Chapters of Part

Chapter 2

Accredited community development finance institutions

340. Application and criteria for accreditation

341. Terms and conditions of accreditation

342. Period of accreditation

343. Delegation of Secretary of State’s functions

Chapter 3

Qualifying investments

344. Qualifying investments: introduction

345. Conditions to be met in relation to loans

346. Conditions to be met in relation to securities

347. Conditions to be met in relation to shares

348. Tax relief certificates

349. No pre-arranged protection against risks

Chapter 4

General conditions

350. No control of CDFI by investor

351. Investor must have beneficial ownership

352. No acquisition of share in partnership

353. No tax avoidance purpose

Chapter 5

Claims for and attribution of CITR

Claims

354. Loans: no claim after disposal or excessive repayments or receipts of value

355. Securities or shares: no claim after disposal or excessive receipts of value

356. No claim after loss of accreditation by the CDFI

Attribution

357. Attribution: general

358. Attribution: bonus shares

Chapter 6

Withdrawal or reduction of CITR

Introduction

359. Overview of Chapter

Disposals

360. Disposal of loan during 5 year period

361. Disposal of securities or shares during 5 year period

Repayment of loans

362. Repayment of loan capital during 5 year period

Receipts of value

363. Value received by investor during 6 year period: loans

364. Value received by investor during 6 year period: securities or shares

365. Receipts of insignificant value to be added together

366. When value is received

367. The amount of value received

368. Value received if there is more than one investment

369. Effect of receipt of value on future claims for CITR

370. Receipts of value by or from connected persons

CITR not due

371. CITR subsequently found not to have been due

Manner of withdrawal or reduction

372. Manner of withdrawal or reduction of CITR

Chapter 7

Supplementary and general

Miscellaneous

373. Information to be provided by the investor

374. Disclosure

375. Nominees

376. Application for postponement of tax pending appeal

377. Identification of securities or shares on a disposal

Definitions

378. Meaning of “issue of securities or shares”

379. Meaning of “disposal”

380. Construction of references to being “held continuously”

381. Meaning of “associate”

382. Minor definitions etc

Part 8

Other reliefs

Chapter 1

Interest payments

The relief: introduction

383. Relief for interest payments

384. General restrictions on relief under Chapter

385. General provisions about loans

386. Loans partly meeting requirements

387. Exclusion of double relief etc

Loans for plant or machinery

388. Loan to buy plant or machinery for partnership use

389. Eligibility requirements for interest on loans within section 388

390. Loan to buy plant or machinery for employment use

391. Eligibility requirements for interest on loans within section 390

Loans for interests in close companies

392. Loan to buy interest in close company

393. Eligibility requirements for interest on loans within section 392

394. Meaning of “material interest” in section 393

395. Meaning of “associate” in section 394

Loans for interests in employee-controlled companies

396. Loan to buy interest in employee-controlled company

397. Eligibility requirements for interest on loans within section 396

Loans for investing in partnerships

398. Loan to invest in partnership

399. Eligibility requirements for interest on loans within section 398

400. Film partnerships

Loans for investing in co-operatives

401. Loan to invest in co-operative

402. Eligibility requirements for interest on loans within section 401

Loans for paying inheritance tax

403. Loan to pay inheritance tax

404. Eligibility requirements for interest on loans within section 403

405. Carry back and forward of relief for interest on loans within section 403

General and supplementary

406. Effect of recovery of capital in the case of some loans

407. Events counting as recovery of capital for section 406

408. Replacement loans

409. Business successions between partnerships

410. Other business successions and reorganisations

411. Ineligibility of interest where business is occupation of commercial woodlands

412. Information

Chapter 2

Gift aid

The relief

413. Overview of Chapter

414. Relief for gifts to charity

415. Meaning of “grossed up amount”

416. Meaning of “qualifying donation”

417. Meaning of “benefits associated with a gift”

Restrictions on associated benefits

418. Restrictions on associated benefits

419. Gifts and benefits linked to periods of less than 12 months

Admission rights

420. Disregard of certain admission rights

421. Admission rights: supplementary

Disqualified overseas gifts

422. Disqualified overseas gifts

Measures to ensure donor’s liability not less than tax treated as deducted

423. Restriction of certain reliefs

424. Charge to tax

425. Total amount of income tax to which individual charged for a tax year

Election to carry back relief

426. Election by donor: gift treated as made in previous tax year

Supplementary

427. Meaning of “charged amount”

428. Meaning of “gift aid declaration”

429. Giving through self-assessment return

430. “Charity” to include exempt bodies

Chapter 3

Gifts of shares, securities and real property to charities etc

Entitlement to relief

431. Relief for gifts of shares, securities and real property to charities etc

432. Meaning of “qualifying investment”

433. Meaning of “qualifying interest in land”

Amount of relief

434. The relievable amount

435. Incidental costs of making disposal

436. Consideration

Value of net benefit to charity

437. Value of net benefit to charity

438. Market value of qualifying investments

439. Meaning of “disposal-related obligation”

440. Meaning and amount of “disposal-related liability”

Special provisions about qualifying interests in land

441. Certificate required from charity

442. Qualifying interests in land held jointly

443. Calculation of relievable amount where joint disposal of interest in land

444. Disqualifying events

Supplementary

445. Prohibition against double relief

446. “Charity” to include exempt bodies

Chapter 4

Annual payments and patent royalties

447. Overview of Chapter

448. Relief for individuals

449. Relief for other persons

450. Other persons: payments ineligible for relief

451. Special rule for persons affected by section 733 of ICTA

452. The gross amount of a payment

Chapter 5

Qualifying maintenance payments

453. Tax reduction for qualifying maintenance payments

454. Meaning of “qualifying maintenance payment”

455. Child support maintenance payments

456. Payments under orders for recovery of benefit etc

Chapter 6

Miscellaneous other reliefs

Payments for life insurance etc

457. Payments to trade unions

458. Payments to police organisations

459. Payments for benefit of family members

460. Residence etc of claimants

Patent royalty receipts

461. Spreading of patent royalty receipts

Part 9

Special rules about settlements and trustees

Chapter 1

Introduction

462. Overview of Part

463. Interpretation of Part

464. Scottish trusts

Chapter 2

General provision about settlements and trustees

Overview

465. Overview of Chapter and interpretation

Settled property

466. Meaning of “settled property” etc

Settlors

467. Meaning of “settlor” etc

468. Meaning of “disposable property”

469. Person ceasing to be a settlor

470. Transfers between settlements

471. Identification of settlor following transfer covered by section 470

472. Settlor where property becomes settled because of variation of will etc

473. Deceased person as settlor where variation of will etc

Trustees

474. Trustees of settlement to be treated as a single and distinct person

475. Residence of trustees

476. How to work out whether settlor meets condition C

Sub-funds

477. Sub-fund elections under Schedule 4ZA to TCGA 1992

Regulations

478. References to settled property etc in regulations

Chapter 3

Special rates for trustees' income

479. Trustees' accumulated or discretionary income to be charged at special rates

480. Meaning of “accumulated or discretionary income”

481. Other amounts to be charged at special rates for trustees

482. Types of amount to be charged at special rates for trustees

483. Sums paid by personal representatives to trustees

Chapter 4

Trustees' expenses and special rates for trustees

484. Trustees' expenses to be set against trustees' trust rate income

485. Carry forward of unused expenses

486. How allowable expenses are to be set against trust rate income

487. Non-UK resident trustees

Chapter 5

Share incentive plans

488. Application of section 479 to trustees of approved share incentive plans

489. “The applicable period” in relation to shares

490. Interpretation of Chapter

Chapter 6

Trustees' first slice of trust rate income

491. Special rates not to apply to first slice of trustees' trust rate income

492. Cases where settlor has made more than one settlement

Chapter 7

Discretionary payments

493. Discretionary payments by trustees

494. Grossing up of discretionary payment and payment of income tax

495. Statement about deduction of income tax

496. Income tax charged on trustees

497. Calculation of trustees' tax pool

498. Types of income tax for the purposes of section 497

Chapter 8

Trustees' expenses and beneficiary’s income

499. Application of Chapter

500. Restrictions on use of trustees' expenses to reduce the beneficiary’s income

501. Non-UK resident beneficiaries

502. Meaning of “untaxed income” in section 501

503. How beneficiary’s income is reduced

Chapter 9

Unauthorised unit trusts

504. Treatment of income of unauthorised unit trust

505. Relief for trustees of unauthorised unit trust

506. Special rules for trustees affected by section 733 of ICTA

Chapter 10

Heritage maintenance settlements

Introduction

507. Overview of Chapter

Trustees' election in respect of income etc

508. Election by trustees

509. Change of circumstances during a tax year

Absence of election and income treated as income of settlor: special rules

510. Sums applied for property maintenance purposes

511. Prevention of double taxation: reimbursement of settlor

Application of property for non-heritage purposes: charge to tax

512. Charge to tax on some settlements

513. Income charged

514. Persons liable

515. Rate of tax

516. Transfer of property between settlements

517. Exemption for income treated as income of settlor

Part 10

Special rules about charitable trusts etc

Introduction

518. Overview of Part

519. Meaning of “charitable trust”

Gifts and other payments

520. Gifts entitling donor to gift aid relief: income tax treated as paid

521. Gifts entitling donor to gift aid relief: income tax liability and exemption

522. Gifts of money from companies: income tax liability and exemption

523. Payments from other charities: income tax liability and exemption

Other exemptions

524. Exemption for profits etc of charitable trades

525. Meaning of “charitable trade”

526. Exemption for profits etc of small-scale trades

527. Exemption from charges under provisions to which section 1016 applies

528. Condition as to trading and miscellaneous incoming resources

529. Exemption for profits from fund-raising events

530. Exemption for profits from lotteries

531. Exemption for property income etc

532. Exemption for savings and investment income

533. Exemption for public revenue dividends

534. Exemption for transactions in deposits

535. Exemption for offshore income gains

536. Exemption for certain miscellaneous income

537. Exemption for income from estates in administration

Claims

538. Requirement to make claim

Restrictions on exemptions

539. Restrictions on exemptions

540. The non-exempt amount

541. Attributing income to the non-exempt amount

542. How income is attributed to the non-exempt amount

Non-charitable expenditure

543. Meaning of “non-charitable expenditure”

544. Section 543: supplementary

545. Section 543(1)(f): meaning of expenditure

546. Section 543(1)(f): tax year in which certain expenditure treated as incurred

547. Section 543(1)(f): payment to body outside the UK

548. Section 543(1)(i) and (j): investments and loans

Substantial donor transactions

549. Transactions with substantial donors

550. Meaning of “relievable gift”

551. Non-charitable expenditure in substantial donor transactions

552. Adjustment if section 551(1) and (2) applied to single transaction

553. Section 551: certain payments and benefits to be ignored

554. Transactions: exceptions

555. Donors: exceptions

556. Connected charities

557. Substantial donor transactions: supplementary

Approved charitable investments and loans

558. Approved charitable investments

559. Securities which are approved charitable investments

560. Conditions to be met for some securities

561. Approved charitable loans

Carry back of excess non-charitable expenditure

562. Excess expenditure treated as non-charitable expenditure of earlier years

563. Rules for attributing excess expenditure to earlier years

564. Adjustments in consequence of section 562

Part 11

Manufactured payments and repos

Chapter 1

Introduction

565. Overview of Part

566. Meaning of “UK shares” and “UK securities”

567. Meaning of “overseas securities” and “overseas dividend”

568. Meaning of “stock lending arrangement”

569. Meaning of “repo”

570. Meaning of “buying back” securities etc

571. Meaning of “related” agreements

Chapter 2

Manufactured payments

Introduction

572. Overview of Chapter

Manufactured dividends on UK shares

573. Manufactured dividends on UK shares

574. Allowable deductions: matching

575. Allowable deductions: restriction on double-counting

576. Manufactured dividends on UK shares: Real Estate Investment Trusts

577. Statements about manufactured dividends

Manufactured interest on UK securities

578. Manufactured interest on UK securities

579. Allowable deductions: matching

580. Allowable deductions: restriction on double counting

Manufactured overseas dividends

581. Manufactured overseas dividends

582. Powers about manufactured overseas dividends

Special cases

583. Manufactured payments exceeding underlying payments

584. Manufactured payments less than underlying payments

585. Power to deal with other special cases

General regulation-making powers

586. Powers about administrative provisions

587. Power for manufactured payments to be eligible for relief

588. Regulation-making powers: general

Interpretation

589. Meaning of “gross amount”: interest and manufactured overseas dividends

590. Meaning of “relevant withholding tax”

591. Interpretation of other terms used in Chapter

Chapter 3

Tax credits: stock lending arrangements and repos

Stock lending arrangements

592. No tax credits for borrower under stock lending arrangement

Repos

593. No tax credits for interim holder under repo

594. No tax credits for original owner under repo

Interpretation

595. Meaning of “manufactured dividend”

Chapter 4

Deemed manufactured payments

Stock lending arrangements

596. Deemed manufactured payments: stock lending arrangements

597. Deemed interest: cash collateral under stock lending arrangements

598. Cash collateral under stock lending arrangements: supplementary

599. Sections 597 and 598: quasi-stock lending arrangements and quasi-cash collateral

600. Meaning of “quasi-stock lending arrangements” and “quasi-cash collateral”

Repos

601. Repo cases in which deeming rules apply

602. Deemed manufactured payments: repos

603. Deemed deductions of tax

604. Deemed increase in repurchase price: price differences under repos

605. Deemed increase in repurchase price: other income tax purposes

Interpretation

606. Interpretation of Chapter

Chapter 5

Price differences under repos

Main tax treatment

607. Treatment of price differences under repos

608. Exceptions to section 607

Additional tax treatment

609. Additional income tax consequences of price differences

Interpretation

610. Repurchase price in deemed manufactured payment case

Power to modify

611. Power to modify Chapter in non-arm’s length case

Chapter 6

Powers to modify repo provisions

612. Non-standard repo cases

613. Redemption arrangements

614. Sections 612 and 613: supplementary

Part 12

Accrued income profits

Chapter 1

Introduction

615. Overview of Part

Chapter 2

Accrued income profits and losses

Charge to tax

616. Charge to tax on accrued income profits

617. Income charged

618. Person liable

Securities to which Chapter applies

619. Meaning of “securities” and when securities are of the same kind

Transfers to which Chapter applies

620. Transactions which are transfers: general

621. Transferors and transferees

622. Application of Chapter to different kinds of transfer

623. Transfers with accrued interest

624. Transfers without accrued interest

625. Transfers with unrealised interest

626. Transfers of variable rate securities

627. Meaning of “variable rate securities”

Calculating accrued income profits and losses

628. Making accrued income profits and losses: general rule

629. Calculating accrued income profits and losses where section 628 applies

630. Making accrued income profits: settlement day outside interest period

631. Amount of accrued income profits where section 630 applies

The payments treated as made on transfers

632. Payment on transfer with accrued interest

633. Payment on transfer without accrued interest

634. Payment on transfer with unrealised interest

635. Payment on transfer of variable rate securities

Exception where there is a transfer to a legatee

636. Exception where there is a transfer to a legatee

Relief for losses

637. Accrued income losses treated as payments in next interest period

Excluded transferors and transferees

638. Excluded persons: disregard of certain payments and transfers

639. Small holdings: individuals

640. Small holdings: personal representatives

641. Small holdings: trustees of a disabled person’s trusts

642. Traders

643. Non-residents

644. Individuals to whom the remittance basis applies

645. Charitable trusts etc

646. Pension scheme trustees

647. Makers of manufactured payments

Further transactions treated as transfers

648. Strips of gilt-edged securities

649. New securities issued with extra return

650. Trading stock appropriations etc

651. Owner becoming entitled to securities as trustee

652. Securities ceasing to be held on charitable trusts

Excluded transfers

653. Stock lending

654. Sale and repurchase arrangements

655. Transfers under sale and repurchase arrangements

656. Power to modify: non-standard sale and repurchase arrangements

657. Power to modify: redemption arrangements

658. Powers to modify: supplementary

Special rules about some calculations

659. Transfers with or without accrued interest: interest in default

660. Transfers with unrealised interest: interest in default

661. Successive transfers with unrealised interest in default

662. New securities issued with extra return: special rules about payments

663. Transfers without accrued interest to makers of manufactured payments

664. Foreign currency securities: sterling equivalent of payments on transfers

665. Foreign currency securities: unrealised interest payable in foreign currency

Nominees and trustees

666. Certain transfers by or to nominees or trustees treated as made by or to others

667. Trustees' accrued income profits treated as settlement income

Relief where transfer proceeds unremittable

668. Relief for unremittable transfer proceeds: general

669. Relief for unremittable transfer proceeds: section 630 profits

670. Withdrawal of relief

Interpretation

671. Meaning of “interest”

672. Meaning of “interest payment day”

673. Meaning of “interest period”

674. Meaning of “the settlement day”

675. The holding of securities

676. Nominal value of securities: general

677. Nominal value: foreign currency securities

Chapter 3

Exemptions relating to interest on securities

678. Exemptions relating to interest on securities: preliminary

679. Interest on securities involving accrued income losses: general

680. Interest on securities involving accrued income losses: foreign trustees

681. Unrealised interest received by transferee after transfer

Part 13

Tax avoidance

Chapter 1

Transactions in securities

Introduction

682. Overview of Chapter

683. Meaning of “income tax advantage”

Person liable to counteraction of income tax advantages

684. Person liable to counteraction of income tax advantage

685. Exception where no tax avoidance object shown

Circumstances in which income tax advantages obtained or obtainable

686. Abnormal dividends used for exemptions or reliefs (circumstance A)

687. Deductions from profits obtained following distribution or dealings (circumstance B)

688. Receipt of consideration representing company’s assets, future receipts or trading stock (circumstance C)

689. Receipt of consideration in connection with relevant company distribution (circumstance D)

690. Receipt of assets of relevant company (circumstance E)

691. Meaning of “relevant company” in sections 689 and 690

692. Abnormal dividends: general

693. Abnormal dividends: the excessive return condition

694. Abnormal dividends: the excessive accrual condition

Procedure for counteraction of income tax advantages

695. Preliminary notification that section 684 may apply

696. Opposed notifications: statutory declarations

697. Opposed notifications: determinations by tribunal

698. Counteraction notices

699. Limit on amount assessed in section 689 and 690 cases

700. Timing of assessments in section 690 cases

Clearance procedure and information powers

701. Application for clearance of transactions

702. Effect of clearance notification under section 701

703. Power to obtain information

The tribunal

704. The tribunal

Appeals

705. Appeals against counteraction notices

706. Rehearing by tribunal of appeal against counteraction notice

707. Statement of case by tribunal for opinion of High Court or Court of Session

708. Cases before High Court or Court of Session

709. Effect of appeals against tribunal’s determination under section 706

710. Appeals from High Court or Court of Session

711. Proceedings in Northern Ireland

Supplementary

712. Application of Chapter where individual within section 684 dies

713. Interpretation of Chapter

Chapter 2

Transfer of assets abroad

Introduction

714. Overview of Chapter

715. Meaning of “relevant transaction”

716. Meaning of “relevant transfer” and “transfer”

717. Meaning of “assets” etc

718. Meaning of “person abroad” etc

719. Meaning of “associated operation”

Charge where power to enjoy income

720. Charge to tax on income treated as arising under section 721

721. Individuals with power to enjoy income as a result of relevant transactions

722. When an individual has power to enjoy income of person abroad

723. The enjoyment conditions

724. Special rules where benefit provided out of income of person abroad

725. Reduction in amount charged where controlled foreign company involved

726. Non-domiciled individuals

Charge where capital sums received

727. Charge to tax on income treated as arising under section 728

728. Individuals receiving capital sums as a result of relevant transactions

729. The capital receipt conditions

730. Non-domiciled individuals

Charge where benefit received

731. Charge to tax on income treated as arising under section 732

732. Non-transferors receiving a benefit as a result of relevant transactions

733. Income charged under section 731

734. Reduction in amount charged: previous capital gains tax charge

735. Non-domiciled individuals

Exemptions: no tax avoidance purpose or genuine commercial transaction

736. Exemptions: introduction

737. Exemption: all relevant transactions post-4 December 2005 transactions

738. Meaning of “commercial transaction”

739. Exemption: all relevant transactions pre-5 December 2005 transactions

740. Exemption: relevant transactions include both pre-5 December 2005 and post-4 December 2005 transactions

741. Application of section 742 (partial exemption)

742. Partial exemption where later associated operations fail conditions

General

743. No duplication of charges

744. Meaning of taking income into account in charging income tax for section 743

745. Rates of tax applicable to income charged under sections 720 and 727 etc

746. Deductions and reliefs where individual charged under section 720 or 727

747. Amounts corresponding to accrued income profits and related interest

Supplementary

748. Power to obtain information

749. Restrictions on particulars to be provided by solicitors

750. Restrictions on particulars to be provided by banks

751. Special Commissioners' jurisdiction on appeals

Chapter 3

Transactions in land

Introduction

752. Overview of Chapter

753. Meaning of disposing of land

754. Priority of other income tax provisions

Charge on gains from transactions in land

755. Charge to tax on gains from transactions in land

756. Income treated as arising when gains obtained from some land disposals

757. Person obtaining gain

758. Income charged

759. Person liable

760. Method of calculating gain

Further provisions relevant to the charge

761. Transactions, arrangements, sales and realisations relevant for Chapter

762. Tracing value

763. Meaning of “another person”

764. Valuations and apportionments

Exemptions

765. Exemption: gain attributable to period before intention to develop formed

766. Exemption: disposals of shares in companies holding land as trading stock

767. Exemption: private residences

Recovery of tax

768. Recovery of tax where consideration receivable by person not assessed

769. Recovery of tax: certificates of tax paid etc

Clearances and power to obtain information

770. Clearance procedure

771. Power to obtain information

Interpretation

772. Interpretation of Chapter

Chapter 4

Sales of occupation income

Introduction

773. Overview of Chapter

774. Meaning of “occupation”

775. Priority of other tax provisions

Charge on sale of occupation income

776. Charge to tax on sale of occupation income

777. Conditions for sections 778 and 779 to apply

778. Income arising where capital amount other than derivative property or right obtained

779. Income arising where derivative property or right obtained

Further provisions relevant to the charge

780. Transactions, arrangements, sales and realisations relevant for Chapter

781. Tracing value

782. Meaning of “other person”

783. Valuations and apportionments

Exemption for sales of going concerns

784. Exemption for sales of going concerns

785. Restriction on exemption: sales of future earnings

Recovery of tax

786. Recovery of tax where consideration receivable by person not assessed

787. Recovery of tax: certificates of tax paid etc

Power to obtain information

788. Power to obtain information

Interpretation

789. Minor definitions

Chapter 5

Avoidance involving trading losses

Introduction

790. Overview of Chapter

Individuals in partnership: recovery of excess relief

791. Charge to tax on income treated as received under section 792

792. Partners claiming excess sideways or capital gains relief

793. Calculating the amount of income treated as received

794. Meaning of “the total amount of trade losses claimed” etc

795. Meaning of “post-1 December 2004 loss”

Individuals claiming relief for film-related trading losses

796. Charge to tax on income treated as received under section 797

797. Individuals claiming sideways or capital gains relief for film-related losses

798. Meaning of “non-taxable consideration” etc

799. Meaning of “disposal of a right of the individual to profits” etc

800. Meaning of “film-related losses” etc

801. Meaning of “capital contribution”

802. Exclusion of amounts in calculating capital contribution by a partner

803. Prohibition against double counting

Individuals in partnership claiming relief for licence-related trading losses

804. Charge to tax on income treated as received under section 805

805. Partners claiming relief for licence-related trading losses

806. Calculation of amount of income treated as received by the individual

807. Supplementary provision relating to calculation in section 806

808. Meaning of “disposal of the licence” etc

809. Other definitions

Part 14

Income tax liability: miscellaneous rules

Chapter 1

Limits on liability to income tax of non-UK residents

Introduction

810. Overview of Chapter

Limit for non-UK resident individuals, trustees etc

811. Limit on liability to income tax of non-UK residents

812. Case where limit not to apply

813. Meaning of “disregarded income”

814. Meaning of “disregarded transaction income”

Limit for non-UK resident companies

815. Limit on liability to income tax of non-UK resident companies

816. Meaning of “disregarded company income”

The independent broker conditions

817. The independent broker conditions

The independent investment manager conditions

818. The independent investment manager conditions

819. Investment managers: the 20% rule

820. Meaning of “qualifying period”

821. Meaning of “relevant disregarded income”

822. Meaning of “beneficial entitlement”

823. Treatment of transactions where requirements of 20% rule not met

824. Application of 20% rule to collective investment schemes

Supplementary

825. Meaning of “disregarded savings and investment income”

826. Meaning of “disregarded annual payments”

827. Meaning of “investment manager” and “investment transaction”

828. Transactions through brokers and investment managers

Chapter 2

Residence

829. Residence of individuals temporarily abroad

830. Residence of individuals working abroad

831. Foreign income of individuals in the United Kingdom for temporary purpose

832. Employment income of individuals in the United Kingdom for temporary purpose

833. Visiting forces and staff of designated allied headquarters

834. Residence of personal representatives

835. Residence rules for trustees and companies

Chapter 3

Jointly held property

836. Jointly held property

837. Jointly held property: declarations of unequal beneficial interests

Chapter 4

Other miscellaneous rules

838. Local authorities and local authority associations

839. Issue departments of the Reserve Bank of India and the State Bank of Pakistan

840. Government securities held by non-UK resident central banks

841. Official agents of Commonwealth countries etc

842. European Economic Interest Groupings

843. Restriction of deductions for annual payments

844. Letters patent etc: exempting provisions

845. Extra return to be treated as interest etc

846. Interpretation of section 845

Part 15

Deduction of income tax at source

Chapter 1

Introduction

847. Overview of Part

848. Income tax deducted at source treated as income tax paid by recipient

849. Interaction with other Income Tax Acts provisions

Chapter 2

Deduction by deposit-takers and building societies

Introduction

850. Overview of Chapter

Duty to deduct sums representing income tax

851. Duty to deduct sums representing income tax

852. Power to make regulations disapplying section 851

Deposit-takers and relevant investments

853. Meaning of “deposit-taker”

854. Power to prescribe persons as deposit-takers

855. Meaning of “investment” and “deposit”

856. Investments which are relevant investments

857. Investments to be treated as being or as not being relevant investments

Investments which are not relevant investments: non-UK resident beneficiaries

858. Declarations of non-UK residence: individuals

859. Declarations of non-UK residence: Scottish partnerships

860. Declarations of non-UK residence: personal representatives

861. Declarations of non-UK residence: settlements

862. Inspection of declarations

Other investments which are not relevant investments

863. General client account deposits

864. Qualifying uncertificated eligible debt security units

865. Qualifying certificates of deposit

866. Qualifying time deposits

867. Lloyd’s premium trust funds

868. Investments held outside the United Kingdom

869. Sale and repurchase of securities

870. Other investments

Supplementary

871. Power to make regulations to give effect to Chapter

872. Power to make orders amending Chapter

873. Discretionary or accumulation settlements

Chapter 3

Deduction from certain payments of yearly interest

Duty to deduct sums representing income tax

874. Duty to deduct from certain payments of yearly interest

Exceptions from duty to deduct

875. Interest paid by building societies

876. Interest paid by deposit-takers

877. UK public revenue dividends

878. Interest paid by banks

879. Interest paid on advances from banks

880. Interest paid on advances from building societies

881. National Savings Bank interest

882. Quoted Eurobond interest

883. Interest on loan to buy life annuity

884. Relevant foreign income

885. Authorised persons dealing in financial instruments

886. Interest paid by recognised clearing houses etc

887. Industrial and provident society payments

888. Statutory interest

Chapter 4

Deduction from payments in respect of building society securities

889. Payments in respect of building society securities

Chapter 5

Deduction from payments of UK public revenue dividends

Introduction

890. Overview of Chapter

891. Meaning of “UK public revenue dividend”

Duty to deduct sums representing income tax

892. Duty to deduct from certain UK public revenue dividends

Payments which are payable gross

893. Payments of UK public revenue dividends which are payable gross

894. Treasury directions

Deduction at source applications

895. Deduction at source application

896. Withdrawal of application

Regulations

897. Power to make regulations

Chapter 6

Deduction from annual payments and patent royalties

Introduction

898. Overview of Chapter

899. Meaning of “qualifying annual payment”

Duty to deduct from annual payments

900. Deduction from commercial payments made by individuals

901. Deduction from annual payments made by other persons

902. Meaning of “applicable rate” in section 901

Duty to deduct from patent royalties

903. Deduction from patent royalties

Supplementary

904. Annual payments for dividends or non-taxable consideration

905. Interpretation of Chapter

Chapter 7

Deduction from other payments connected with intellectual property

Certain royalties etc where usual place of abode of owner is abroad

906. Certain royalties etc where usual place of abode of owner is abroad

907. Meaning of “relevant intellectual property right”

908. Royalty payments etc made through UK resident agents

909. Royalty payments: further provision

Proceeds of a sale of patent rights

910. Proceeds of a sale of patent rights: payments to non-UK residents

Chapter 8

Chapters 6 and 7: special provision in relation to royalties

Deduction at special rates

911. Double taxation arrangements: deduction at treaty rate

912. Power to make directions disapplying section 911

913. Interpretation of sections 911 and 912

Discretion to make payments gross

914. EU companies: discretion to make payment gross

915. Power to make directions disapplying section 914

916. Duty of payee to notify if payment not exempt

917. Supplementary

Chapter 9

Manufactured payments

Manufactured dividends

918. Manufactured dividends on UK shares: Real Estate Investment Trusts

Manufactured interest

919. Manufactured interest on UK securities: payments by UK residents etc

920. Foreign payers of manufactured interest: the reverse charge

921. Cases where interest on underlying securities paid gross

Manufactured overseas dividends

922. Manufactured overseas dividends: payments by UK residents etc

923. Foreign payers of manufactured overseas dividends: the reverse charge

924. Power to reduce section 923 liability

925. Power to provide set-off entitlement

Supplementary

926. Interpretation of Chapter

927. Regulation-making powers: general

Chapter 10

Deduction from non-commercial payments by companies

928. Chargeable payments connected with exempt distributions

Chapter 11

Payments between companies etc: exception from duties to deduct

Introduction

929. Overview of Chapter

Exception from duties to deduct for excepted payments

930. Exception from duties to deduct sums representing income tax

931. Power to make directions disapplying section 930

932. Meaning of “qualifying partnership”

Excepted payments

933. UK resident companies

934. Non-UK resident companies

935. PEP and ISA managers

936. Recipients who are to be paid gross

937. Partnerships

Incorrect belief that payment is an excepted payment

938. Consequences of reasonable but incorrect belief

Chapter 12

Funding bonds

939. Duty to retain bonds where issue treated as payment of interest

940. Exception from duty to retain bonds

Chapter 13

Unauthorised unit trusts

941. Deemed payments to unit holders and deemed deductions of income tax

942. Income tax to be collected from trustees

943. Calculation of trustees' income pool

Chapter 14

Tax avoidance: directions for duty to deduct to apply

944. Directions for deduction from payments to non-UK residents

Chapter 15

Collection: deposit-takers, building societies and certain companies

Introduction

945. Overview of Chapter

946. Payments within this section

947. Return periods

948. Meaning of “accounting period”

Returns of income tax

949. Payments in an accounting period

950. Payments otherwise than in an accounting period

Collection and payment of income tax

951. Collection and payment of income tax

Set-off

952. Conditions for a set-off claim

953. How a set-off claim works

954. Proceedings begun after a set-off claim is made

955. Proceedings begun before a set-off claim is made

Assessments and errors

956. Assessments where section 946 payment included in return

957. Assessments in other cases

958. Payer’s duty to deliver amended return

959. Application of Income Tax Acts provisions about time limits for assessments

960. Further provisions about assessments

Supplementary

961. Relationship between Chapter and Income Tax Acts powers

962. Power to make regulations modifying Chapter

Chapter 16

Collection: certain payments by other persons

963. Collection of income tax on certain payments by other persons

Chapter 17

Collection through self-assessment return

964. Collection through self-assessment return

Chapter 18

Other regimes involving the deduction of income tax at source

Visiting performers

965. Overview of sections 966 to 970

966. Duty to deduct and account for sums representing income tax

967. Calculation of sums representing income tax

968. Treatment of sums representing income tax

969. Regulations

970. Supplementary

Non-resident landlords

971. Income tax due in respect of income of non-resident landlords

972. Regulations under section 971

Real Estate Investment Trusts

973. Income tax due in respect of distributions

974. Regulations under section 973

Chapter 19

General

Supplementary

975. Statements about deduction of income tax

976. Arrangements for payments of interest less tax or at specified net rate

977. Payments to companies

978. Application to public departments

979. Designated international organisations: exceptions from duties to deduct

980. Derivative contracts: exception from duties to deduct

981. Foreign currency securities etc: exception from duties to deduct

982. Income tax is calculated by reference to gross amounts

Interpretation

983. Meaning of “deposit”

984. Meaning of “financial instrument”

985. Meaning of “qualifying certificate of deposit”

986. Meaning of “qualifying uncertificated eligible debt security unit”

987. Meaning of “quoted Eurobond”

Part 16

Income Tax Acts definitions etc

Chapter 1

Definitions

988. Overview of Chapter

989. The definitions

990. Meaning of “Act”

991. Meaning of “bank”

992. Meaning of “company”

993. Meaning of “connected” persons

994. Meaning of “connected” persons: supplementary

995. Meaning of “control”

996. Meaning of “farming” and related expressions

997. Meaning of “generally accepted accounting practice” and related expressions

998. Meaning of “grossing up”

999. Meaning of “local authority”

1000. Meaning of “local authority association”

1001. Meaning of “offshore installation”

1002. Regulations about the meaning of “offshore installation”

1003. Meaning of “oil and gas exploration and appraisal”

1004. Meaning of “property investment LLP”

1005. Meaning of “recognised stock exchange”

1006. Meaning of “research and development”

1007. Meaning of “unit trust scheme”

Chapter 2

Other Income Tax Acts provisions

1008. Scotland

1009. Sources of income within the charge to income tax or corporation tax

1010. Application of Income Tax Acts to recognised investment exchanges

1011. References to married persons, or civil partners, living together

1012. Relationship between rules on highest part of total income

1013. Territorial sea of the United Kingdom

1014. Orders and regulations

1015. Territorial scope of charges under certain provisions to which section 1016 applies

1016. Table of provisions to which this section applies

Part 17

Definitions for purposes of Act and final provisions

Definitions for the purposes of Act

1017. Abbreviated references to Acts

1018. “Act” to include Scottish and Northern Ireland legislation in some cases

1019. Meaning of “certificate of deposit”

1020. Claims and elections

1021. Application of definitions of “connected” persons and “control”

1022. Meaning of “debenture”

1023. Meaning of “double taxation arrangements”

1024. Meaning of “gilt-edged securities”

1025. Meaning of “modified net income”

1026. Meaning of “non-qualifying income” for the purposes of section 1025

Final provisions

1027. Minor and consequential amendments

1028. Power to make consequential provision

1029. Power to undo changes

1030. Transitional provisions and savings

1031. Repeals and revocations

1032. Index of defined expressions

1033. Extent

1034. Commencement

1035. Short title

Schedule 1: Minor and consequential amendments

Part 1: Income and Corporation Taxes Act 1988

Part 2: Other enactments

Part 3: Amendment having effect in relation to shares issued after 5 April 2007

Schedule 2: Transitionals and savings

Part 1: General provisions

Part 2: Changes in the law

Part 3: Rates at which income tax is charged

Part 4: Personal reliefs

Part 5: Losses (except losses on disposal of shares)

Part 6: Losses on disposal of shares

Part 7: Enterprise investment scheme

Part 8: Venture capital trusts

Part 9: Other reliefs

Part 10: Special rules about settlements and trustees

Part 11: Special rules about charitable trusts etc

Part 12: Manufactured payments and repos

Part 13: Accrued income profits

Part 14: Tax avoidance

Part 15: Deduction of income tax at source

Part 16: Other provisions

Schedule 3: Repeals and revocations

Part 1: Repeals and revocations: general

Part 2: Repeals having effect in relation to shares issued after 5 April 2007

Schedule 4: Index of defined expressions

 

An Act to restate, with minor changes, certain enactments relating to income tax; and for connected purposes.

[20th March 2007]

Be it enacted by the Queen’s most Excellent Majesty, by and with the advice and consent of the Lords Spiritual and Temporal, and Commons, in this present Parliament assembled, and by the authority of the same, as follows:—

Part 1

Overview

1 Overview of Income Tax Acts

(1) The following Acts make provision about income tax—

(a) ITEPA 2003 (which is about charges to tax on employment income, pension income and social security income),

(b) ITTOIA 2005 (which is about charges to tax on trading income, property income, savings and investment income and some other miscellaneous income), and

(c) this Act (which contains the other main provisions about income tax).

(2) There are also provisions about income tax elsewhere: see in particular—

(a) Part 18 of ICTA (double taxation relief),

(b) CAA 2001 (allowances for capital expenditure), and

(c) Part 4 of FA 2004 (pension schemes etc).

(3) Schedule 1 to the Interpretation Act 1978 (c. 30) defines “the Income Tax Acts” (as all enactments relating to income tax).

2 Overview of Act

(1) This Act has 17 Parts.

(2) Part 2 contains basic provisions about income tax including—

(a) provision about the annual nature of income tax (Chapter 1),

(b) the rates at which income tax is charged (Chapter 2), and

(c) the calculation of income tax liability (Chapter 3).

(3) Part 3 is about taxpayers' personal reliefs including—

(a) personal allowances (Chapter 2),

(b) blind persons' allowances (Chapter 2), and

(c) tax reductions for married couples and civil partners (Chapter 3).

(4) Part 4 is about loss relief including relief for—

(a) trade losses (Chapters 2 and 3),

(b) losses from property businesses (Chapter 4),

(c) losses in an employment or office (Chapter 5),

(d) losses on disposal of shares (Chapter 6), and

(e) losses from miscellaneous transactions (Chapter 7).

(5) Part 5 is about relief under the enterprise investment scheme.

(6) Part 6 is about—

(a) relief for investment in venture capital trusts, and

(b) other matters relating to venture capital trusts.

(7) Part 7 is about community investment tax relief.

(8) Part 8 is about a variety of reliefs including relief for—

(a) interest payments (Chapter 1),

(b) gifts to charity including gift aid (Chapters 2 and 3),

(c) annual payments and patent royalties (Chapter 4), and

(d) maintenance payments (Chapter 5).

(9) Part 9 contains special rules about settlements and trustees including—

(a) general provision about settlements and trustees (Chapter 2),

(b) special income tax rates for trusts (Chapters 3, 4, 5 and 6),

(c) rules about trustees' expenses (Chapters 4 and 8),

(d) rules about trustees' discretionary payments (Chapter 7),

(e) rules about unauthorised unit trusts (Chapter 9), and

(f) rules about heritage maintenance settlements (Chapter 10).

(10) Part 10 contains special rules about charitable trusts etc.

(11) Part 11 is about manufactured payments and repos.

(12) Part 12 is about accrued income profits.

(13) Part 13 is about tax avoidance in relation to—

(a) transactions in securities (Chapter 1),

(b) transfers of assets abroad (Chapter 2),

(c) transactions in land (Chapter 3),

(d) sales of occupation income (Chapter 4), and

(e) trade losses (Chapter 5).

(14) Part 14 deals with some miscellaneous rules about income tax liability, including—

(a) limits on liability to income tax for non-UK residents (Chapter 1),

(b) special rules about residence (Chapter 2), and

(c) rules about jointly held property (Chapter 3).

(15) Part 15 is about the deduction of income tax at source.

(16) Part 16 contains definitions which apply for the purposes of the Income Tax Acts and other general provisions which apply for the purposes of those Acts.

(17) Part 17—

(a) contains provisions to be used in interpreting this Act,

(b) introduces Schedule 1 (minor and consequential amendments),

(c) introduces Schedule 2 (transitional provisions and savings),

(d) introduces Schedule 3 (repeals and revocations, including of spent enactments),

(e) introduces Schedule 4 (index of defined expressions that apply for the purposes of this Act),

(f) confers powers on the Treasury to make orders, and

(g) makes provision about the coming into force of this Act.

 
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