Income Tax Act 2007 (c. 3)

(The document as of February, 2008)

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

(4) In subsection (3) for "other provision of the Tax Acts" substitute "provision of the Corporation Tax Acts not contained in this Act".

(5) In subsection (4)--

(a) omit "1(6),"

(b) omit "257C, 582A(1),", and

(6) In subsection (5)--

(a) before "section 717 of ITEPA 2003" insert "section 570B of the Capital Allowances Act or",

(b) omit "or section 873 of ITTOIA 2005",

(d) in paragraph (a) omit "or ITTOIA 2005".

209 Omit section 829 (application of Income Tax Acts to public departments and avoidance of exempting provisions).

210 In section 830(1) (territorial sea) omit "income tax and".

211 In section 831(3) (interpretation of ICTA) after the definition of "ITTOIA 2005" insert--

" "ITA 2007" means the Income Tax Act 2007; " .

212 (1) Amend section 832 (interpretation of the Tax Acts) as follows.

(2) In subsection (1)--

(a) for "In the Tax Acts, except" substitute "In the Corporation Tax Acts, except",

(b) omit the definitions of "basic rate" and "basic rate limit",

(d) omit the definition of "industrial assurance business",

(e) omit the definition of "interest",

(f) omit the definitions of "investment LLP" and "property investment LLP",

(g) omit the definition of "lower rate",

(h) in the definition of "notice" omit "or in a form authorised (in relation to the case in question) by directions under section 118 of the Finance Act 1998",

(i) in the definition of "overseas property business" omit paragraph (a) and, in paragraph (b), omit "for the purposes of corporation tax,",

(j) omit the definition of "preference dividend",

(k) in the appropriate place insert--

" "property investment LLP" has the meaning given by section 842B; " ,

(l) omit the definition of "the rate applicable to trusts",

(m) omit the definition of "relevant foreign income",

(n) omit the definitions of "starting rate" and "starting rate limit",

(o) omit the definition of "step-child",

(p) in the definition of "tax credit", in paragraph (a) omit "for the purposes of corporation tax" and omit paragraph (b),

(q) omit the definitions of "the dividend ordinary rate", "the dividend trust rate" and "the dividend upper rate",

(r) omit the definition of "UK property business", and

(s) for the definition of "unit trust scheme" substitute--

" "unit trust scheme" has the same meaning as in the Income Tax Acts (see section 1007 of ITA 2007); " .

(3) After subsection (2) insert--

" (2A) Chapter 2 of Part 9 of ITA 2007 (which relates to settlements and trustees) applies for the purposes of the Corporation Tax Acts as it applies for the purposes of the Income Tax Acts. "

(4) In subsection (4A) for "Tax Acts" substitute "Corporation Tax Acts".

(5) Omit subsection (5).

(6) In the sidenote for "Tax Acts" substitute "Corporation Tax Acts etc".

213 Omit section 833 (interpretation of the Income Tax Acts).

214 In section 834(1) (interpretation of the Corporation Tax Acts), at the end insert--

" "venture capital trust" has the same meaning as in Part 6 of ITA 2007. "

215 Omit section 835 ("total income" in the Income Tax Acts).

216 Omit section 836 (returns of total income).

217 Omit section 836B (table of provisions to which that section applies).

218 Omit section 837 ("annual value" of land).

219 (1) Amend section 837A (meaning of "research and development") as follows.

(2) In subsection (1) for "Tax Acts" substitute "Corporation Tax Acts".

(3) In subsection (2) for "regulations under subsection (3)" substitute "subsections (2A) and (2B)".

(4) For subsections (3) and (4) substitute--

" (2A) Activities that, as a result of regulations made under section 1006 of ITA 2007, are "research and development" for the purposes of that section are also "research and development" for the purposes of this section.

(2B) And activities that, as a result of any such regulations, are not "research and development" for the purposes of that section are also not "research and development" for the purposes of this section. "

220 In section 837B(1) (meaning of "oil and gas exploration and appraisal") for "Tax Acts" substitute "Corporation Tax Acts".

221 In section 837C(1) and (5) (meaning of "offshore installation") for "Tax Acts" substitute "Corporation Tax Acts".

222 In section 838(1) (subsidiaries) for "Tax Acts" substitute "Corporation Tax Acts".

223 (1) Amend section 839 (connected persons) as follows.

(2) In subsection (1) for "Tax Acts" substitute "Corporation Tax Acts".

(3) In subsection (3B)(b) for the words from "in whom" to "vested" substitute--

" (i) in whom the property comprised in the settlement is for the time being vested, or

(ii) in whom the management of that property is for the time being vested, " .

224 In section 840 (meaning of "control" in certain contexts) for "Tax Acts" substitute "Corporation Tax Acts".

225 After section 840 insert--

" 840ZA Meaning of "tax advantage"

(1) In any provision of the Corporation Tax Acts in relation to which it is provided that "tax advantage" has the meaning given by this section, "tax advantage" means--

(a) a relief from tax or increased relief from tax,

(b) a repayment of tax or increased repayment of tax,

(d) the avoidance of a possible assessment to tax.

(2) For the purposes of subsection (1)(c) and (d) it does not matter whether the avoidance or reduction is effected--

(a) by receipts accruing in such a way that the recipient does not pay or bear tax on them, or

(b) by a deduction in calculating profits or gains.

(3) In this section "relief from tax" includes--

(a) a tax credit under section 231 for the purposes of corporation tax, and

(b) a tax credit under section 397(1) of ITTOIA 2005 for the purposes of income tax. "

226 In section 840A(1) (banks)--

(a) after "In any provision" insert "of the Corporation Tax Acts", and

(b) after paragraph (c) insert--

" (ca) the European Investment Bank; or " .

227 (1) Amend section 841 (recognised stock exchanges and recognised investment exchanges) as follows.

(2) For subsections (1) and (2) substitute--

" (1) In the Corporation Tax Acts "recognised stock exchange" has the same meaning as in the Income Tax Acts (see section 1005 of ITA 2007). "

(3) In subsection (3) for "Tax Acts" substitute "Corporation Tax Acts".

228 In section 842(1) (investment trusts) for "Tax Acts" substitute "Corporation Tax Acts".

229 Omit section 842AA (venture capital trusts).

230 In section 842A(1) (meaning of "local authority") for "Tax Acts" substitute "Corporation Tax Acts".

231 (1) Amend section 842B (meaning of "investment LLP" and "property investment LLP") as follows.

(2) In subsection (1)--

(a) for "this Act" substitute "the Corporation Tax Acts", and

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

(3) In subsection (2) omit "an investment LLP or".

(4) In the sidenote omit ""investment LLP" and".

232 (1) Amend Schedule 14 (provisions ancillary to section 266) as follows.

(2) In paragraph 2 after sub-paragraph (1) insert--

" (1A) In sub-paragraph (1)(a) "industrial assurance business" means any industrial assurance business within the meaning given by--

(a) section 1(2) of the Industrial Assurance Act 1923, or

(b) Article 3(1) of the Industrial Assurance (Northern Ireland) Order 1979,

which was carried on before 1 December 2001. "

(3) In paragraph 6(1) for "subsections (6) and (7)" substitute "subsection (7)".

(4) In paragraph 8 after sub-paragraph (3) insert--

" (3A) In sub-paragraph (3) "industrial assurance business" means any industrial assurance business within the meaning given by--

(a) section 1(2) of the Industrial Assurance Act 1923, or

(b) Article 3(1) of the Industrial Assurance (Northern Ireland) Order 1979,

which was carried on before 1 December 2001. "

233 In Part 1 of Schedule 15 (qualifying policies for the purposes of section 267) after paragraph 20 insert--

" Meaning of "industrial assurance business"

20A In this Part of this Schedule "industrial assurance business" means any industrial assurance business within the meaning given by--

(a) section 1(2) of the Industrial Assurance Act 1923, or

(b) Article 3(1) of the Industrial Assurance (Northern Ireland) Order 1979,

which was carried on before 1 December 2001. "

234 Omit Part 1 of Schedule 15B (venture capital trusts: relief from income tax).

235 Omit Schedule 16 (collection of income tax on company payments).

236 In paragraph 2(b) of Schedule 19B (petroleum extraction activities: exploration expenditure supplement) after "section 837B" insert "of this Act and section 1003 of ITA 2007".

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

(2) In paragraph 8 for the words from "for corporation tax" to the end substitute "section 56(5)".

(3) In paragraph 9(1) for "charity", in both places where it occurs, substitute "charitable company".

(4) In paragraph 10(1)--

(a) in paragraph (b) for "charity", in both places where it occurs, substitute "charitable company", and

(b) in paragraph (d) for "charity", in both places where it occurs, substitute "charitable company".

(5) In the heading for "Charities" substitute "Charitable companies".

238 (1) Amend Schedule 23A (manufactured dividends and interest) as follows.

(2) In paragraph 1(1)--

(a) omit the definition of "interest manufacturer",

(b) in the definition of "manufactured dividend", "manufactured interest" and "manufactured overseas dividend" omit ", "manufactured interest"" and ", 3", and

" "manufactured interest" means an amount--

(a) which is representative of a periodical payment of interest on United Kingdom securities, and

(b) which, under a contract or other arrangements for the transfer of the securities, one of the parties is required to pay to the other; " .

(3) In paragraph 2 (manufactured dividends on UK equities: general)--

(a) in sub-paragraph (2) before "Tax" insert "Corporation",

(b) in sub-paragraph (3)(b) before "Tax" insert "Corporation",

(d) in sub-paragraph (6)(a) omit "to which sub-paragraph (3) above applies",

(e) in sub-paragraph (6) after paragraph (a) insert " , and

(aa) the dividend manufacturer is a non-UK resident company within the charge to corporation tax, " , and

(f) in sub-paragraph (7)(c) after "sub-paragraph (3)(b) above" insert "or section 573(2) of ITA 2007".

(4) Omit paragraphs 2A to 3A (deductibility of manufactured payment in case of manufacturer of UK equities; manufactured interest on UK securities: general; and manufactured interest on gilt-edged securities etc).

(5) In paragraph 4 (manufactured overseas dividends)--

(a) omit sub-paragraphs (2) to (3B),

(b) in sub-paragraph (4)--

(i) for "sub-paragraph (2) above" substitute "section 922(2) of ITA 2007 (amount of income tax to be deducted at source)",

(ii) for "sub-paragraph (3) above" substitute "section 923 of that Act (income tax to be accounted for and paid)",

(iii) for "Tax Acts" substitute "Corporation Tax Acts",

(iv) omit the words from "as they apply" to "branch or agency in the United Kingdom",

(v) in paragraph (a) for "persons" substitute "companies", for "him" substitute "the recipient" and for "under sub-paragraph (2) above" substitute "under section 922(2) of ITA 2007", and

(vi) in paragraph (b) for "persons" substitute "companies" and for "him" substitute "the recipient",

(d) omit sub-paragraph (6),

(e) omit sub-paragraphs (7) and (7AA), and

(f) in sub-paragraph (9) before "Tax" insert "Corporation".

(6) In paragraph 7 (irregular manufactured payments)--

(a) in sub-paragraph (1)--

(i) omit "manufactured interest or",

(ii) omit "3 or",

(iii) omit "interest or",

(iv) omit ", as the case may be" where it occurs for the first time,

(v) omit ", 3(1)",

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

(vii) for "paragraphs 2 or 3" substitute "paragraph 2",

(b) in sub-paragraph (1A) omit "manufactured interest or",

(i) for "Tax Acts" substitute "Corporation Tax Acts",

(ii) omit "3(1) or",

(iii) omit "manufactured interest or", and

(iv) omit "3 or", and

(d) in sub-paragraph (4)(b) omit "or set off" and "income or".

(7) In paragraph 7A(10) for the definition of "tax advantage" substitute--

" "tax advantage" has the meaning given by section 840ZA; " .

(8) In paragraph 8 (dividend manufacturing regulations: general)--

(a) in sub-paragraph (1)--

(i) omit ", manufactured interest" in both places where it occurs,

(ii) omit ", interest manufacturers",

(iii) for "2 to 4" substitute "2 and 4", and

(iv) before "Tax Acts" insert "Corporation",

(b) in sub-paragraph (1A)--

(i) before "Tax Acts" insert "Corporation", and

(ii) omit "or the 1992 Act",

(i) omit paragraphs (c) and (d),

(ii) omit "or to", and

(iii) omit ", manufactured interest or manufactured overseas dividends",

(d) omit sub-paragraph (2A), and

(e) in sub-paragraph (3)--

(i) in paragraph (a) after "apply" insert "for corporation tax purposes", and

(ii) omit paragraph (b).

239 In Schedule 28AA (provision not at arm's length) in paragraph 5(7) for paragraphs (a) and (b) substitute--

" (a) disregarded income within the meaning given by section 813 of ITA 2007 (limits on liability to income tax of non-UK residents), or

(b) disregarded company income within the meaning given by section 816 of that Act. "

240 Omit Schedule 28B (venture capital trusts: meaning of "qualifying holding").

Part 2 Other enactments

Chevening Estate Act 1959 (c. 49)

241 In section 2(1A)(a) of the Chevening Estate Act 1959 (provisions as to income tax, estate duty and stamp duty) for "section 505(1A) of the Income and Corporation Taxes Act 1988" substitute "section 533(2) of the Income Tax Act 2007".

Taxes Management Act 1970 (c. 9)

242 The Taxes Management Act 1970 is amended as follows.

243 In section 6(1) (declarations on taking office) at the end of paragraph (c) add "or section 704 of ITA 2007".

244 In section 7(6) (notice of liability to income tax and capital gains tax) for "lower rate" substitute "savings rate".

245 (1) Amend section 12AB(1) (partnership return to include partnership statement) as follows.

(2) In paragraph (a)--

(a) insert the word "and" at the end of sub-paragraph (ii), and

(b) omit sub-paragraph (iv) and the "and" immediately before it.

(3) In paragraph (b) for "tax, credit or charge" substitute "tax or credit".

246 In section 12B(4A)(a) (records to be kept for purposes of returns) for sub-paragraph (ii) substitute--

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

247 (1) Amend section 17 (interest paid or credited by banks etc without deduction of income tax or after deduction of income tax) as follows.

(2) In subsection (1) after "bank" insert "or building society".

(3) In subsection (1A) for "section 840A of the principal Act" substitute "section 991 of ITA 2007".

(4) After subsection (6) insert--

" (7) In the application of this section in relation to building societies, references to interest include references to dividends.

For this purpose "dividend" includes any distribution (whether or not described as a dividend). "

(5) In the sidenote after "banks" insert ", building societies".

248 In section 21(5A) (transactions in securities etc) for "Schedule 23A to the principal Act" substitute "Chapter 2 of Part 11 or Chapter 9 of Part 15 of ITA 2007".

249 In section 24(3A) (power to obtain information as to income from securities) for "section 840A of the principal Act" substitute "section 991 of ITA 2007".

250 In section 31C(2)(b) (appeals: appeals to Special Commissioners) for "section 350 of the principal Act" substitute "section 963(3) of ITA 2007.

251 In section 36(3A) (fraudulent or negligent conduct)--

(a) after "section 257BA of the principal Act" insert "or any of sections 47 to 49 of ITA 2007", and

(b) for "(elections as to transfer of married couple's allowance)" substitute "(tax reductions for married couples and civil partners: elections to transfer relief)".

252 (1) Amend section 37A (effect of assessment where allowances transferred) as follows.

(2) For "income tax reduction or deduction from total income" in both places where it occurs substitute "deduction from net income or tax reduction".

(3) After "spouse" insert "or civil partner".

(4) After "the principal Act" insert "or section 39, 51 or 52 of ITA 2007".

253 In section 42(7) (procedure for making claims etc)--

(a) in paragraph (a) omit "723(3),",

(b) omit "and" at the end of paragraph (d), and

(f) sections 668 and 669 of ITA 2007. "

254 In section 43A(2A) (further assessments: claims etc)--

(a) in paragraph (a) after "section 257BA of the principal Act" insert "or any of sections 47 to 49 of ITA 2007",

(b) in paragraph (a) for "(election as to transfer of married couple's allowance)" substitute "(tax reductions for married couples and civil partners: elections to transfer relief)", and

255 (1) Amend section 46B (questions to be determined by Special Commissioners) as follows.

(2) In subsection (4)--

(a) in paragraph (c) for "sections 740 and 743(1) of the principal Act" substitute "sections 720, 727 and 731 of ITA 2007", and

(b) in paragraph (d) for "of that Act" substitute "of the principal Act".

(3) In subsection (5) after paragraph (d) insert " , or

(e) section 1013 of ITA 2007, " .

256 (1) Amend section 46C as follows.

(2) In subsection (1)(b) omit "of the principal Act".

(3) In subsection (3)--

(a) omit "of the principal Act",

(b) in paragraph (b) after "460" insert "of the principal Act",

(d) in paragraph (d) for "sections 527 and 536 (reliefs in respect of royalties)" substitute "section 527 of the principal Act (spreading of patent royalty receipts)",

(e) in paragraph (e) after "Part XVIII" insert "of the principal Act", and

(f) after that paragraph insert--

" (f) Part 10 of ITA 2007 (charitable trusts: claims for exemption);

(g) sections 461 and 908 of ITA 2007 (reliefs in respect of royalties). "

257 In section 55(1) (recovery of tax not postponed)--

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