Income Tax Act 2007 (c. 3)

(The document as of February, 2008)

-- Back --

Page 55

Pages: P.1 | P.2 | P.3 | P.4 | P.5 | P.6 | P.7 | P.8 | P.9 | P.10 | P.11 | P.12 | P.13 | P.14 | P.15 | P.16 | P.17 | P.18 | P.19 | P.20 | P.21 | P.22 | P.23 | P.24 | P.25 | P.26 | P.27 | P.28 | P.29 | P.30 | P.31 | P.32 | P.33 | P.34 | P.35 | P.36 | P.37 | P.38 | P.39 | P.40 | P.41 | P.42 | P.43 | P.44 | P.45 | P.46 | P.47 | P.48 | P.49 | P.50 | P.51 | P.52 | P.53 | P.54 | P.55 | P.56 | P.57 | P.58 | P.59 | P.60 | P.61 | P.62 | P.63 | P.64 | P.65 | P.66 | P.67 | P.68 | P.69 | P.70

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

(a) omit paragraph (c), and

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

258 For section 87 (interest on income tax on company payments) substitute--

" 87 Interest on overdue income tax deducted at source

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

(2) Subsection (1) applies--

(a) whether or not an assessment is made, and

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

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

(4) Subsection (5) applies to any income tax which--

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

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

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

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

(a) the date when the income tax was paid,

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

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

(6) In this section "return period" means a period for which a return is required to be made under Chapter 15 of Part 15 of ITA 2007. "

259 In section 91(3)(c) (effect on interest of reliefs) for "lower rate" substitute "savings rate".

260 (1) Amend section 98 (special returns etc) as follows.

(2) In subsection (4A)(a) for "section 350(1) of, or Schedule 16 to, the principal Act" substitute "Chapter 15 or 16 of Part 15 of ITA 2007".

(3) In subsection (4B) for paragraphs (a) to (d) substitute--

" (a) the payment is made by a company, local authority or qualifying partnership (within the meaning of section 932 of ITA 2007) without an amount representing income tax on the payment being deducted from it,

(b) at the time the payment is made, the company, authority or partnership--

(i) does not believe that the payment is an excepted payment for the purposes of Chapter 11 of Part 15 of ITA 2007 (payments between companies etc: exception from duties to deduct), or

(ii) if it does so believe, cannot reasonably do so,

(c) the payment is one from which tax is deductible under Part 15 of ITA 2007 unless the company, authority or partnership reasonably believes that it is an excepted payment for the purposes of Chapter 11 of that Part, and

(d) the payment is not an excepted payment at the time the payment is made. "

(4) Omit subsection (4C).

(5) For subsection (4D) substitute--

" (4D) A payment is within this subsection if--

(a) it is a payment from which a sum representing income tax must be deducted under Chapter 6 (deduction from annual payments and patent royalties) or 7 (deduction from other payments connected with intellectual property) of Part 15 of ITA 2007,

(b) a company, purporting to rely on section 911 of that Act (double taxation arrangements: deduction at treaty rate), deducts less from the payment than required by those Chapters, and

(c) at the time the payment is made the payee (as defined in section 913 of that Act) is not entitled to relief under double taxation arrangements (as defined in section 1023 of that Act) and the company--

(i) does not believe that it is entitled to such relief, or

(ii) if it does so believe, cannot reasonably do so. "

(6) For subsection (4DA) substitute--

" (4DA) A payment is within this subsection if--

(b) a company, purporting to rely on section 914 of ITA 2007 (EU companies: discretion to make payment gross), makes the payment without deducting a sum representing income tax, and

(c) at the time the payment is made the payment is not exempt from income tax as a result of section 758 of ITTOIA 2005 (exemption for certain interest and royalty payments) and the company--

(i) does not believe that the payment is so exempt, or

(ii) if it does so believe, cannot reasonably do so. "

(7) In subsection (4E)(b) for "section 349(2) of the principal Act" substitute "section 874 of ITA 2007".

(8) In the first column of the Table--

(a) omit the entry relating to regulations under section 42A of ICTA,

(b) omit the entry relating to regulations under section 476(1) of ICTA,

(d) omit the entry relating to section 482(3) of ICTA,

(e) omit the entry relating to regulations under section 482(11) of ICTA,

(f) omit the entry relating to section 483 of ICTA,

(g) omit the entry relating to regulations under section 555(7) of ICTA,

(h) omit the entry relating to section 745(1) of ICTA,

(i) omit the entry relating to paragraph 5(2) of Schedule 15B to ICTA,

(j) omit the entry relating to regulations under paragraph 11B(5) of Schedule 28B to ICTA,

(k) omit the entry relating to section 86(12) of FA 1995,

(l) omit the entry relating to regulations under Schedule 33 to FA 2002, and

(m) at the end insert--

" sections 242 and 243(1) and (2) of ITA 2007;
section 271(2) of ITA 2007;
regulations under Chapter 5 of Part 6 of ITA 2007;
regulations under section 330(5) of ITA 2007;
section 703 of ITA 2007;
section 748(1) and (2) of ITA 2007;
section 771 of ITA 2007;
section 788 of ITA 2007;
section 862 of ITA 2007;
regulations under section 871(1) of ITA 2007;
regulations under section 969(1) of ITA 2007;
regulations under section 971(1) of ITA 2007;
paragraph 155(5) of Schedule 2 to ITA 2007. "

(9) In the second column of the Table--

(a) omit the entry relating to regulations under section 42A of ICTA,

(b) omit the entry relating to section 350(1) of ICTA,

(d) omit the entry relating to regulations under section 477A(1) of ICTA,

(e) omit the entry relating to section 482(2) of ICTA,

(f) omit the entry relating to regulations under section 482(11) of ICTA,

(g) omit the entry relating to regulations under section 555(7) of ICTA,

(h) omit the entry relating to paragraph 5(1) of Schedule 15B to ICTA,

(i) omit the entry relating to Schedule 16 to ICTA,

(j) omit the entry relating to regulations under Schedule 33 to FA 2002,

(k) omit the entry relating to regulations under section 122 of FA 2006, and

(l) at the end insert--

" sections 240 and 241 of ITA 2007;
section 271(1) of ITA 2007;
regulations under Chapter 5 of Part 6 of ITA 2007;
section 373 of ITA 2007;
regulations under section 871(1) of ITA 2007;
Chapter 15 of Part 15 of ITA 2007;
Chapter 16 of Part 15 of ITA 2007;
regulations under section 969(1) of ITA 2007;
regulations under section 971(1) of ITA 2007;
regulations under section 973(1) of ITA 2007. "

(10) After the paragraph at the end of the Table insert--

" References in this Table to sections 240, 241, 242 and 243(1) and (2) of ITA 2007 are to provisions that apply only in relation to shares issued after 5 April 2007. "

261 In section 99A (certificates of non-liability to income tax) for "section 477A of the principal Act (building societies) or section 480B of that Act (deposit-takers)" substitute "section 852 of ITA 2007".

262 After section 99A insert--

" 99B Declarations under Chapter 2 of Part 15 of ITA 2007

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

263 In section 118(1) (interpretation)--

(a) in the definition of "company" for "section 832(1) of the principal Act (with section 468 of that Act)" substitute "section 992(1) of ITA 2007 (with section 468 of the principal Act)", and

(b) after the definition of "ITTOIA 2005" insert--

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

264 In paragraph 9(2) of Schedule 1A (claims etc not included in returns)--

(a) in paragraph (a) for "(personal reliefs for non-residents)" substitute "or section 56 or 460 of ITA 2007 (residence etc of claimants)", and

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

Finance Act 1971 (c. 68)

265 Omit section 21 of, and Schedule 3 to, the Finance Act 1971 (occupational pension schemes).

Biological Standards Act 1975 (c. 4)

266 In section 2(4A)(a) of the Biological Standards Act 1975 (general provisions about the Board) for "section 505(1A) of the Income and Corporation Taxes Act 1988" substitute "section 533(2) of the Income Tax Act 2007".

House of Commons Disqualification Act 1975 (c. 24)

267 In Part 3 of Schedule 1 to the House of Commons Disqualification Act 1975 (offices disqualifying for membership: other disqualifying offices) after "section 706 of the Income and Corporation Taxes Act 1988" insert "or section 704 of the Income Tax Act 2007".

Inheritance Tax Act 1984 (c. 51)

268 The Inheritance Tax Act 1984 is amended as follows.

269 In section 157(6) (non-residents' bank accounts) for "section 840A of the Taxes Act 1988" substitute "section 991 of the Income Tax Act 2007".

270 In section 204(5) (limitation of liability) for "section 739 or 740 of the Taxes Act 1988" substitute "Chapter 2 of Part 13 of the Income Tax Act 2007".

271 In section 272 (general interpretation) in the definition of "authorised unit trust" for the words from "section 469" to "section)" substitute "the Income Tax Acts (see section 1007 of the Income Tax Act 2007)".

Administration of Justice Act 1985 (c. 61)

272 In paragraph 36(3) of Schedule 2 to the Administration of Justice Act 1985--

(a) for "sections 745(3) and" substitute "section", and

(b) after "1988" insert "and sections 749, 771(5) and (6) and 788(5) and (6) of the Income Tax Act 2007".

Building Societies Act 1986 (c. 53)

273 In section 8(9) of the Building Societies Act 1986 (raising funds and borrowing) for "482(6) of the Income and Corporation Taxes Act 1988" substitute "866(2) and (3) of the Income Tax Act 2007".

Finance Act 1988 (c. 39)

274 The Finance Act 1988 is amended as follows.

275 (1) Amend section 130 (provisions for securing payment by company of outstanding tax) as follows.

(2) In subsection (7)--

(a) in paragraph (a), for "203 of the Taxes Act 1988" substitute "684 of the Income Tax (Earnings and Pensions) Act 2003",

(b) in paragraph (b), for "to which section 350(4)(a) of that Act (company payments which are not distributions) applies" substitute "within section 946 of the Income Tax Act 2007 (collection of tax: deposit-takers, building societies and certain companies)", and

(i) omit sub-paragraphs (i) and (ii) and the "or" immediately before sub-paragraph (iii), and

(ii) in sub-paragraph (iii) for "555 of that Act" substitute "966 of the Income Tax Act 2007".

(3) After subsection (9) insert--

" (9A) In this section any reference to a provision of the Income Tax (Earnings and Pensions) Act 2003 or the Income Tax Act 2007 shall be construed, in relation to any time at which a corresponding provision of the Taxes Act 1988 or an enactment repealed by that Act had effect, as a reference to that corresponding provision. "

276 In Schedule 6 (commercial woodlands) omit paragraph 3(3) to (5).

277 In paragraph 6(1)(b) of Schedule 12 (building societies: change of status) for the words from "section 477A" to the end substitute "Chapter 2 of Part 15 of the Income Tax Act 2007 (deduction of income tax at source: deposit-takers and building societies)".

Finance Act 1989 (c. 26)

278 The Finance Act 1989 is amended as follows.

279 In section 88(1) (corporation tax: policy holders' fraction of profits) for "lower rate" substitute "savings rate".

280 In section 111 (residence of personal representatives)--

(a) omit subsections (1) to (3) and (6) to (8), and

(b) in subsection (5) omit the words "Subject to subsections (6) to (8) below,".

281 (1) Amend section 151 (assessment of trustees and personal representatives) as follows.

(2) In subsection (2)(a) omit the words from "other" to "2005,".

(3) Omit subsection (2)(b) and the "and" immediately before it.

(4) Omit subsection (3).

282 In section 182(3) (disclosure of information) at the end of paragraph (d) insert "or section 704 of the Income Tax Act 2007".

283 (1) Amend Schedule 5 (employee share ownership trusts) as follows.

(2) In paragraph 15 for "section 840 of the Taxes Act 1988" substitute "section 995 of the Income Tax Act 2007".

(3) In paragraph 16(2)--

(a) in paragraph (b) for "section 840 of that Act" substitute "section 995 of the Income Tax Act 2007", and

(b) in paragraph (c) for "that Act" substitute "the Taxes Act 1988".

Finance Act 1990 (c. 29)

284 (1) Amend section 25 of the Finance Act 1990 (c. 29) (donations to charity by individuals) as follows.

(2) Omit subsections (1) to (9A), (11) and (13).

(3) In subsection (10)--

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

(b) after "donation" insert "for the purposes of Chapter 2 of Part 8 of the Income Tax Act 2007 (gift aid)", and

(4) In subsection (12)(a) for "charity" substitute "charitable company".

Finance Act 1991 (c. 31)

285 The Finance Act 1991 (c. 31) is amended as follows.

286 Omit section 53 (Income Tax (Building Society) Regulations 1986).

287 Omit section 72 (deduction of trading losses).

Social Security Contributions and Benefits Act 1992 (c. 4)

288 The Social Security Contributions and Benefits Act 1992 (c. 4) is amended as follows.

289 In section 4A(3)(i)(i) (earnings of workers supplied by service companies etc) for "section 839 of the Income and Corporation Taxes Act 1988" substitute "section 993 of the Income Tax Act 2007".

290 (1) Amend Schedule 2 (levy of Class 4 contributions with income tax) as follows.

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

" (ac) "ITA 2007" means the Income Tax Act 2007; " .

(3) In paragraph 3--

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

(i) for "the Act of 1988" substitute "ITA 2007",

(ii) in paragraph (a) for "sections 380 and 381" substitute "sections 64 and 72",

(iii) in paragraph (c) for "section 385" substitute "section 83", and

(iv) in paragraph (d) for "sections 388 and 389" substitute "section 89",

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

(i) omit "of the Act of 1988",

(ii) in paragraph (a) after "Chapter I of Part VII" insert "of the Act of 1988 and Chapters 2 and 3 of Part 3 and sections 457, 458 and 459 of ITA 2007",

(iii) in paragraph (b) for "section 353" substitute "section 383 of ITA 2007",

(iv) omit paragraph (c), and

(v) in paragraph (d) for "section 390" substitute "sections 88 and 94 of ITA 2007",

(d) in sub-paragraph (5)--

(i) omit paragraph (a), and

(ii) in paragraph (b) for "section 353 of that Act" substitute "section 383 of ITA 2007".

(4) In paragraph 9(4) for "section 832 of the Act of 1988" substitute "section 989 of ITA 2007".

Social Security Contributions and Benefits (Northern Ireland) Act 1992 (c. 7)

291 The Social Security Contributions and Benefits (Northern Ireland) Act 1992 is amended as follows.

292 In section 4A(3)(i)(i) (earnings of workers supplied by service companies etc) for "section 839 of the Income and Corporation Taxes Act 1988" substitute "section 993 of the Income Tax Act 2007".

293 (1) Amend Schedule 2 (Schedule 2 to the Social Security Contributions and Benefits Act 1992: levy of Class 4 contributions with income tax) as follows.

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

" (ac) "ITA 2007" means the Income Tax Act 2007; " .

(3) In paragraph 3--

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

(i) for "the Act of 1988" substitute "ITA 2007",

(ii) in paragraph (a) for "sections 380 and 381" substitute "sections 64 and 72",

(iii) in paragraph (c) for "section 385" substitute "section 83", and

(iv) in paragraph (d) for "sections 388 and 389" substitute "section 89",

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

(i) omit "of the Act of 1988",

(ii) in paragraph (a) after "Chapter I of Part VII" insert "of the Act of 1988 and Chapters 2 and 3 of Part 3 and sections 457, 458 and 459 of ITA 2007",

(iii) in paragraph (b) for "section 353" substitute "section 383 of ITA 2007",

(iv) omit paragraph (c), and

(v) in paragraph (d) for "section 390" substitute "sections 88 and 94 of ITA 2007",

(d) in sub-paragraph (5)--

(i) omit paragraph (a), and

(ii) in paragraph (b) for "section 353 of that Act" substitute "section 383 of ITA 2007".

(4) In paragraph 9(4) for "section 832 of the Act of 1988" substitute "section 989 of ITA 2007".

Taxation of Chargeable Gains Act 1992 (c. 12)

294 The Taxation of Chargeable Gains Act 1992 is amended as follows.

295 (1) Amend section 4 (rates of capital gains tax) as follows.

(2) In subsection (1) for "lower rate" substitute "savings rate".

(3) In subsection (1AA) for "rate applicable to trusts under section 686 of the Taxes Act" substitute "trust rate".

(4) In subsection (1AB) for the words from "(after" to "total income" substitute "an individual has no Step 3 income for a year of assessment or the individual's Step 3 income".

(5) In subsection (1AC) for the words from "his total income" to the end substitute "the individual's Step 3 income".

(6) In subsection (4) for the words from "his total income" to the end substitute "the individual's Step 3 income".

(7) At the end insert--

" (5) For the purposes of this section the "Step 3 income" of an individual means the individual's net income less allowances deducted at Step 3 of the calculation in section 23 of ITA 2007 for the purpose of calculating the individual's income tax liability.

(6) Section 989 of ITA 2007 (the definitions) applies for the purposes of this section as it applies for income tax purposes. "

296 (1) Amend section 6 (rates of capital gains tax: special cases) as follows.

(2) In subsection (2)--

(a) in paragraph (a) for the words from "a deduction" to "liability" substitute "a person is entitled to relief by reference to the amount of a deficiency",

(b) in paragraph (c) for "those purposes" substitute "the purposes of extra liability",

(d) for "that amount" substitute "the amount of the deficiency or (as the case may be) the amount mentioned in paragraph (c)".

(3) In subsection (3) for "his total income" substitute "the person's Step 3 income".

(4) Omit subsection (4).

297 For section 11 (visiting forces, agents-general etc) substitute--

" 11 Visiting forces and official agents

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

(a) a period of residence in the United Kingdom, or

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

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

(3) "A member of the staff of a mission" is to be read in accordance with the Diplomatic Privileges Act 1964. "

298 In section 16(1) (computation of losses) for "section 72 of the Finance Act 1991" substitute "sections 261B, 261D and 263ZA".

299 In section 37 (consideration chargeable to tax on income) at the end insert--

" (5) If--

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

(b) the income tax has been paid,

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

(6) If--

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

(i) for whom the capital amount was obtained, or

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

(b) the income tax has been paid,

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

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

300 In section 39 (exclusion of expenditure by reference to tax on income) after subsection (3) insert--

" (4) If--

(b) the income tax has been paid,

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

301 In section 79(8) (charge on settlor with interest in settlement etc: supplementary provisions) for "691(2) of the Taxes Act (certain income of maintenance funds for historic buildings not to be income of settlor etc)" substitute "508 of ITA 2007 (trustees' election in respect of income arising from heritage maintenance property)".

302 In section 97(3) (settlements etc: supplementary provisions) for "section 740(2)(b) of the Taxes Act" substitute "section 733 of ITA 2007".

303 In section 98(2) (power to obtain information for purposes of sections 87 to 90)--

(a) for the words from the beginning to "745(1)" substitute "Sections 748(3) to (5), 749 and 750 of ITA 2007 shall have effect in relation to subsection (1) above as they have effect in relation to section 748(1) and (2) of that Act", and

(b) in paragraph (a) for "Chapter III of Part XVII of the Taxes Act" substitute "Chapter 2 of Part 13 of that Act".

304 In section 101B(1)(a) (transfer of a company's assets to VCT), for "section 842AA of the Taxes Act" substitute "Part 6 of ITA 2007".

305 In section 101C(7) (transfer within group to VCT), for "section 842AA of the Taxes Act" substitute "Part 6 of ITA 2007".

306 (1) Amend section 105A (shares acquired on the same day: elections for alternative treatment) as follows.

(2) In subsection (4)--

(a) after "Chapter 3 of Part 7 of the Taxes Act" insert ", relief under Part 5 of ITA 2007",

(b) after "section 299 of the Taxes Act" insert "or section 246 of ITA 2007",

(d) for "that section" substitute "section 299 of the Taxes Act or subsection (4) of section 246 of ITA 2007".

(3) In subsection (7)--

(a) after "Chapter 3 of Part 7 of the Taxes Act" insert "or relief under Part 5 of ITA 2007",

-- Back --

Stat