Income Tax Act 2007 (c. 3)

(The document as of February, 2008)

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(7) In paragraph D(1) for "person in question" substitute "section 703(1) company".

(8) In paragraph E--

(a) in sub-paragraph (1) for "person in question" substitute "section 703(1) company",

(b) in sub-paragraph (2)--

(i) for "person" substitute "company",

(ii) for "tax", in both places where it occurs, substitute "corporation tax", and

(iii) for "the year" substitute "the accounting period", and

(i) for "person" substitute "section 703(1) company", and

(ii) for "tax" substitute "corporation tax".

156 (1) Amend section 705 (appeals against Board's notices under section 703) as follows.

(2) In subsection (1)--

(a) for "person to whom" substitute "company to which", and

(b) for "him" substitute "it".

(3) In subsection (2)--

(a) for "he", in the first place where it occurs, substitute "the company", and

(b) for "he or they" substitute "the company or the Board".

157 (1) Amend section 705A (statement of case by tribunal for opinion of High Court) as follows.

(2) In subsections (1) and (2) for "his" substitute "its".

(3) In subsection (3) for "he" substitute "that party".

(4) In subsection (5)--

(a) for "he" and "the party requiring it" substitute "that party", and

(b) for "his" substitute "that party's".

(5) In subsections (10) and (11)(a) and (b) for "tax" substitute "corporation tax".

158 In section 705B(1) (proceedings in Northern Ireland) for the words from "the Taxes Acts" to "shall have effect" substitute "the Management Act and the Corporation Tax Acts shall have effect".

159 (1) Amend section 707 (procedure for clearance in advance) as follows.

(2) In subsection (1)--

(a) for "person", wherever it occurs, substitute "company", and

(b) for "him", wherever it occurs, substitute "it".

(3) In subsection (3) for "person" substitute "company".

160 In section 708 (power to obtain information)--

(a) for "person", in both places where it occurs, substitute "company",

(b) for "whom" substitute "which",

(d) for "his" substitute "its".

161 (1) Amend section 709 (meaning of "tax advantage" and other expressions) as follows.

(2) In subsection (1) for "tax", in each place where it occurs, substitute "corporation tax".

(3) In subsection (4)(a) for "he", in both places where it occurs, substitute "the recipient".

(4) In subsection (6)(a)--

(a) for "he", in both places where it occurs, substitute "the recipient", and

(b) for "him" substitute "the recipient".

(5) In the sidenote for ""tax advantage"" substitute ""corporation tax advantage"".

162 Omit sections 710 to 727A (accrued income scheme).

163 (1) Amend section 728 (information) as follows.

(2) In subsection (1) for "sections 710 to 727A" substitute "Part 12 of ITA 2007 (accrued income profits)".

(3) In subsection (2) omit the words from "In relation to transactions before" to the end.

(4) In subsection (5) for "sections 710 to 727A" substitute "Part 12 of ITA 2007 (accrued income profits)".

(5) After subsection (8) insert--

" (9) In this section "securities" has the meaning given by section 619 of ITA 2007. "

164 (1) Amend section 730A (treatment of price differential on sale and repurchase of securities) as follows.

(2) In subsections (2), (3) and (4) for "Tax Acts" substitute "Corporation Tax Acts".

(3) In subsection (7)--

(a) for "tax" substitute "corporation tax", and

(b) omit the words from ", 613(4) or" to "Act 2004".

165 (1) Amend section 730B (interpretation of section 730A) as follows.

(2) In subsection (3) for "has the same meaning as in section 737A" substitute "means United Kingdom equities, United Kingdom securities or overseas securities".

(3) After subsection (3) insert--

" (3A) In this section "United Kingdom equities", "United Kingdom securities" and "overseas securities" have the meanings given by paragraph 1(1) of Schedule 23A. "

166 (1) Amend section 730BB (exchange gains and losses on sale and repurchase of securities) as follows.

(2) In subsection (7) for "this section and sections 730A, 737A and 737C" substitute "the excepted provisions specified in subsection (7A) below".

(3) After subsection (7) insert--

" (7A) The excepted provisions are--

(a) this section,

(b) section 730A,

(d) section 737C,

(e) Chapter 4 of Part 11 of ITA 2007 (deemed manufactured payments), and

(f) Chapter 5 of Part 11 of ITA 2007 (price differences under repos). "

167 (1) Amend section 731 (application and interpretation of sections 732 to 734) as follows.

(2) In subsection (2A) after "737A(5)" insert "below or section 602(1) of ITA 2007".

(3) In subsection (9) in the definition of "securities" for "for the purposes of sections 710 to 728" substitute "within the meaning of Chapter 2 of Part 12 of ITA 2007 (accrued income profits)".

168 Omit section 733(2) (persons entitled to exemptions).

169 In section 734(1) (persons other than dealers in securities) for "section 380 or 381" substitute "section 64 or 72 of ITA 2007".

170 In section 736(4) (company dealing in securities: distribution materially reducing value of holding) for "section 839 shall have effect in relation to paragraph (b) above" substitute ", for the purposes of paragraph (b) above, whether persons are connected is determined in accordance with section 839, but".

171 (1) Amend section 736B (deemed manufactured payments in the case of stock lending arrangements) as follows.

(2) In subsection (2)--

(a) after "that Schedule" insert ", and section 97 of the Finance Act 1996 (loan relationships: manufactured interest),", and

(b) after "apply" insert "for corporation tax purposes".

(3) In subsection (2A)--

(a) in paragraph (a) omit "income tax or", and

(b) in paragraph (b) omit "total income or, as the case may be,".

172 (1) Amend section 736C (deemed interest: cash collateral under stock lending arrangements) as follows.

(2) In subsections (2), (3) and (4) for "Tax Acts" substitute "Corporation Tax Acts".

(3) Omit subsection (8).

(4) In subsection (11) in the definition of "tax advantage" for "section 709(1)" substitute "section 840ZA".

173 (1) Amend section 737A (sale and repurchase of securities: deemed manufactured payments) as follows.

(2) In subsection (5) --

(a) after "dividend manufacturing regulations" insert ", and section 97 of the Finance Act 1996 (loan relationships: manufactured interest),", and

(b) after "apply" insert "for corporation tax purposes".

(3) In subsection (5A), omit "income tax or", "total income or" and "Where the relevant person is a company,".

174 (1) Amend section 737C (deemed manufactured payments: further provisions) as follows.

(2) In subsection (7)--

(a) for "Subsection (8)" substitute "Subsection (9)",

(b) for "paragraph 3 of Schedule 23A" substitute "section 97 of the Finance Act 1996", and

(3) Omit subsection (8).

(4) For subsection (9) substitute--

" (9) Where this subsection applies, the repurchase price of the securities shall be treated, for the purposes of section 730A, as increased by an amount equal to the amount of the dividend mentioned in section 737A(2)(a) or (2A)(a). "

175 In section 737D(1) (power to provide for manufactured payments to be eligible for relief)--

(a) after "from" insert "corporation", and

(b) omit the words from ", 613(4) or" to "Act 2004".

176 (1) Amend section 737E (power to modify sections 727A, 730A, 730BB and 737A to 737C) as follows.

(2) In subsections (1) and (2) omit "727A,".

(3) In subsections (4) and (6)(b) omit "or 263D".

(4) In the sidenote omit "727A,".

177 Omit sections 739 to 746 (transfer of assets abroad).

178 In section 747(4) (imputation of chargeable profits and creditable tax of controlled foreign companies) omit paragraph (b) and the "and" immediately before it.

179 (1) Amend section 761 (offshore income gains) as follows.

(2) In subsection (6)--

(a) for "charity" in the first place where it occurs, substitute "charitable company",

(b) for "tax" substitute "corporation tax", and

(3) After that subsection insert--

" (6A) See section 535 of ITA 2007 for an exemption for income tax purposes for offshore income gains accruing to a charitable trust.

(6B) If property held on charitable trusts ceases to be subject to charitable trusts and that property represents directly or indirectly an offshore income gain, the trustees shall be treated as if they had disposed of and immediately reacquired that property for a consideration equal to its market value, any gain (calculated in accordance with Schedule 28) accruing being treated as an offshore income gain not accruing to a charity.

(6C) In this section "charity" and "charitable company" have the same meaning as in section 506 and "market value" has the same meaning as in the 1992 Act. "

180 In section 762 (offshore income gains accruing to persons resident or domiciled abroad)--

(a) in subsection (5)--

(i) in paragraph (a) for "sections 739 and 740" substitute "Chapter 2 of Part 13 of ITA 2007 (transfer of assets abroad)", and

(ii) in paragraph (b) for "those sections" substitute "that Chapter", and

(b) in subsection (6) for "section 739 or 740 above" substitute "Chapter 2 of Part 13 of ITA 2007".

181 In section 763 (deduction of offshore income gain in determining capital gain) for subsection (8) substitute--

" (8) For the purposes of subsection (7)(b) above, whether the person who made the disposal is connected with another person is determined in accordance with section 839. "

182 Omit section 775 (sale by individual of income derived from his personal activities).

183 In section 775A(4)(c) (transfer of rights to receive annual payments) for "(annual payments that are not charges on income)" substitute "(certain annual payments not to form part of the income of a company for corporation tax purposes)".

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

(2) In subsection (1) for "persons" substitute "companies".

(3) In subsection (3)--

(a) for "Tax Acts" substitute "Corporation Tax Acts", and

(b) for "person by whom" substitute "company by which".

(4) In subsection (3A) omit paragraph (a).

(5) Omit subsection (3B).

(6) In subsection (6)--

(a) in paragraph (a)--

(i) omit "Part 2 of ITTOIA 2005 or", and

(ii) for "person" substitute "company", and

(b) in paragraph (b) omit from "section 158" to "be)".

(7) In subsection (7)--

(a) omit "Part 2 of ITTOIA 2005 or", and

(b) for "person who" substitute "company which".

(8) In subsection (8)--

(a) for "some other person" substitute "another person which is a company", and

(b) for "that other person" substitute "that company".

(9) Omit subsection (9).

(10) In subsection (11)--

(a) for "person" wherever it occurs substitute "company",

(b) for "who" substitute "which",

(d) for "his", in the first place where it occurs, substitute "its".

185 (1) Amend section 777 (provisions supplementary to sections 775 and 776) as follows.

(2) In subsection (1) for the words from "sections 775" to the end substitute "section 776".

(3) In subsection (2)--

(a) for "the relevant provisions" substitute "section 776 and this section", and

(b) for "sections 775 and 776" substitute "section 776".

(4) In subsection (4) for "the relevant provisions" substitute "section 776 and this section".

(5) In subsection (6)--

(a) for "the relevant provisions" substitute "section 776 and this section", and

(b) for "sections 775 and 776" substitute "section 776".

(6) In subsection (7) for "the relevant provisions" to "receipts)" substitute "section 776 and this section".

(7) In subsection (8)--

(a) for "a person" substitute "a company",

(b) for "tax under the relevant provisions" substitute "corporation tax under section 776",

(d) in paragraph (b) for "the person", in both places where it occurs, substitute "the company", and

(e) omit the second sentence.

(8) Omit subsection (9).

(9) In subsection (10) for "Sections 775 and 776 have" substitute "Section 776 has".

(10) In subsection (11) for "person" substitute "company".

(11) For subsection (12) substitute--

" (12) Where under section 776(8) the company charged to corporation tax is not the person ("P") by whom the gain was realised and the tax has been paid, then for the purposes of sections 37 and 39 of the 1992 Act (profits taxable as income excluded from tax on chargeable gains) P shall be regarded as having been charged to that tax. "

(12) In subsection (13)--

(a) for "the relevant provisions" substitute "section 776 and this section",

(b) for ""capital amount"" to "accordingly" substitute--

" "capital", in relation to a gain, means that, apart from section 776, the gain does not fall to be included in any calculation of income for corporation tax purposes; " , and

(13) In the sidenote for "sections 775 and 776" substitute "section 776".

186 In section 778 (power to obtain information)--

(a) in subsection (1) for "sections 775 and 776" substitute "section 776".

(b) in subsection (2)(b)--

(i) for "sections 775 and 776" substitute "section 776", and

(ii) for "those sections" substitute "that section".

187 In section 779(13)(ca) (sale and lease-back: limitation on tax reliefs)--

(a) for "section 836B" substitute "section 1016 of ITA 2007", and

(b) for "section 392" substitute "section 152 of ITA 2007".

188 In section 780 (sale and lease-back: taxation of consideration received) after subsection (3B) insert--

" (3C) An amount charged to income tax by virtue of subsection (3A)(a) above is treated for income tax purposes as an amount of income. "

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

(2) After subsection (1) insert--

" (1A) An amount charged to income tax under subsection (1) above is treated for income tax purposes as an amount of income. "

(3) In subsection (4)(ab)--

(a) for "section 836B" substitute "section 1016 of ITA 2007", and

(b) for "section 392" substitute "section 152 of ITA 2007".

190 In section 785 (definitions for the purposes of sections 781 to 784) in the definition of "capital sum" for "section 836B" substitute "section 1016 of ITA 2007".

191 (1) Amend section 789 (double taxation arrangements made under old law) as follows.

(2) In subsection (2) for paragraph (a) substitute--

" (a) to bear income tax at--

(i) the savings rate, where that income is savings income;

(ii) the dividend ordinary rate, where that income is dividend income; or

(iii) the basic rate, in any other case; and " .

(3) In subsection (2)(b) for the words from "except" to the end substitute " except--

(i) for the purpose of section 274 (limits on relief under sections 266 and 273); and

(ii) for the purpose of calculating "adjusted net income" for the purposes of Chapter 1 of Part 7 of this Act (see section 256A) or Chapters 2 and 3 of Part 3 of ITA 2007 (see section 58 of that Act). "

192 In section 793 (reduction of United Kingdom taxes by amount of credit due) after subsection (2) insert--

" (3) Credit against income tax is given effect at Step 6 of the calculation in section 23 of ITA 2007. "

193 (1) Amend section 796 (limits on credit for foreign tax: income tax) as follows.

(2) In subsection (1) after "Income Tax Acts" insert ", except a reduction under section 26 of FA 2005".

(3) After subsection (2) insert--

" (2A) See section 29(2) and (3) of ITA 2007 (tax reductions limited by reference to tax liability) for further limits on the total amount of credit for foreign tax to be allowed to a person against income tax. "

(4) Omit subsection (3).

194 In section 798C (disallowed credit: use as deduction) for subsection (2) substitute--

" (2) The taxpayer's income shall be treated as reduced by the amount of disallowed credit.

(3) Subsection (2) applies only in so far as the amount of disallowed credit does not exceed the amount of any loss attributable to the income or gain in respect of which the foreign tax was paid.

(4) For the purpose of subsection (3), payment of the foreign tax is to be taken into account despite section 795(2). "

195 In section 801A (restriction of relief for underlying tax) for subsection (9) substitute--

" (9) For the purposes of this section, whether a person is connected with another is determined in accordance with section 839. "

196 In section 803(10) (underlying tax reflecting interest on loans) for "section 839" to the end substitute ", for the purposes of that subsection, whether a company is connected with a bank is determined in accordance with section 839."

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

(2) In subsection (5B)(a) for the words from "be treated" to "excess" substitute "be chargeable for that year to an amount of income tax equal to the excess".

(3) Omit subsection (6).

198 (1) Amend section 807 (sale of securities with or without accrued interest) as follows.

(2) In subsection (1)(a) for "section 714(2) as receiving annual profits or gains on the day an interest period ends" substitute "section 628(5) of ITA 2007 as making accrued income profits in an interest period".

(3) In subsection (1)(b) for "chargeable period in which the day falls" substitute "tax year in which the accrued income profits are treated as made by virtue of section 617(2) of that Act".

(4) In the full-out words of subsection (1)--

(a) for "profits or gains", in each place where it occurs, substitute "accrued income profits", and

(b) omit "or corporation tax".

(5) In subsection (2)(b) for "which is treated as reduced by virtue of section 714(5)" substitute "as respects which the person is entitled to an exemption from liability to income tax under section 679 of ITA 2007".

(6) In subsection (2) for "R is the amount by which it is treated as reduced" substitute "R is the amount of the exemption".

(7) For subsection (5) substitute--

" (5) Expressions used in this section and in Chapter 2 of Part 12 of ITA 2007 (accrued income profits) have the same meaning as in that Chapter. "

(8) Omit subsection (6).

199 In section 809(1)(a) (relief in respect of discretionary trusts) for the words from the beginning to "687(2)" substitute "income tax is treated under section 494 of ITA 2007 as having been paid in relation to a payment made by the trustees of a settlement".

200 In section 811(2) (deduction for foreign tax where no credit allowable)--

(a) insert "and" immediately after paragraph (a), and

(b) omit paragraph (b) and the "and" immediately after it.

201 In section 812(5) (withdrawal of right to tax credit of certain non-resident companies connected with unitary states) for paragraph (c) substitute--

" (c) whether a person is connected with another is determined in accordance with section 839; " .

202 In section 816 (disclosure of information)--

(a) in subsection (3) after "bank" insert "(within the meaning of that subsection)", and

(b) omit subsection (3A).

203 Omit section 818 (arrangements for payments of interest less tax or of fixed net amount).

204 Omit section 819 (old references to standard rate tax).

205 In section 821(3) (under-deductions from payments made before passing of annual Act)--

(a) for paragraph (a) substitute--

" (a) any payment to which section 906 of ITA 2007 applies (certain royalties etc where usual place of abode of owner is abroad), and " , and

(b) omit paragraph (aa) and the "and" immediately after it.

206 Omit section 823 (adjustments of reliefs where given at different times).

207 Omit section 827A (territorial scope of charges under certain provisions to which section 836B applies).

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

(2) In subsection (1) for "other provision of the Tax Acts" substitute "provision of the Corporation Tax Acts not contained in this Act".

(3) In subsection (2) omit "841(1)(b) or".

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