Income Tax Act 2007 (c. 3)

(The document as of February, 2008)

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346 In paragraph 1(1)(a) of Schedule 5BA (enterprise investment scheme: application of taper relief) after "Taxes Act" insert "or Part 5 of ITA 2007".

347 In paragraph 3(1)(f) of Schedule 5C (VCTs: deferred charge on re-investment) for "section 842AA(8) of the Taxes Act" substitute "section 281(3) of ITA 2007".

348 (1) Amend Schedule 7C (reliefs for transfers to approved share plans) as follows.

(2) In paragraph 2(6) (conditions relating to the disposal), in the definition of "ordinary share capital" for "section 832(1) of the Taxes Act" substitute "section 989 of ITA 2007".

(3) In paragraph 7(1) and (3) (shares: special provision) after "Taxes Act" insert "or Part 5 of ITA 2007".

349 In Schedule 8 (leases), in paragraph 5(6) for "any amount chargeable to tax under section 348 or 349 of the Taxes Act" substitute "any amount from which a sum representing income tax is required to be deducted under Part 15 of ITA 2007".

Finance (No. 2) Act 1992 (c. 48)

350 In section 28(1)(a) of the Finance (No. 2) Act 1992 (powers of inspection) after "1988" insert "or under Part 10 of the Income Tax Act 2007".

Tribunals and Inquiries Act 1992 (c. 53)

351 In paragraph 39(c) of Part 1 of Schedule 1 to the Tribunals and Inquiries Act 1992 (tribunals under direct supervision of Council) at the end insert "or Chapter 1 of Part 13 of the Income Tax Act 2007".

Judicial Pensions and Retirement Act 1993 (c. 8)

352 In section 3(6) of the Judicial Pensions and Retirement Act 1993 (the appropriate annual rate) for "section 279(1) of the Finance Act 2004" substitute "section 4 of the Income Tax Act 2007".

Charities Act 1993 (c. 10)

353 In section 25A(1) and (2) of the Charities Act 1993 (meaning of terms relating to Scotland and Northern Ireland) after "1988" insert "or Part 10 of the Income Tax Act 2007".

Finance Act 1993 (c. 34)

354 The Finance Act 1993 is amended as follows.

355 Omit section 80 (transitional relief for charities etc).

356 Omit section 118 (Scottish trusts).

357 (1) Amend section 176 (ancillary trust funds) as follows.

(2) In subsection (3) for paragraph (a) substitute--

" (a) section 636 of ITA 2007 (exception where there is a transfer to a legatee); " .

(3) In subsection (4) for "sections 710 to" substitute "Part 12 of ITA 2007 and section".

358 (1) Amend section 180 (underwriting profits to be earned income) as follows.

(2) In subsection (1) for paragraph (b) substitute--

" (b) accordingly, shall constitute--

(i) for the purposes of Part 4 of the Finance Act 2004, relevant UK earnings within section 189(2)(b) of that Act, and

(ii) income in relation to which the treatment in section 836(2) of ITA 2007 does not apply. "

(3) In the sidenote for "earned income" substitute "relevant UK earnings etc".

359 In section 182(1)(ca)(ii) (Lloyd's underwriters: regulations) for the words from "section 737E(2) and (8)" to the end substitute "section 569 (repos) or 613 (redemption arrangements) of ITA 2007;".

360 In section 212 (interpretation) at the end insert ", and "ITA 2007" means the Income Tax Act 2007".

361 (1) Amend Schedule 20A (Lloyd's underwriters: conversion to limited liability underwriting) as follows.

(2) In paragraph 2--

(a) in sub-paragraph (2) for "The carry-forward provision" substitute "Section 83 of ITA 2007", and

(b) omit sub-paragraphs (3) and (4).

(3) In paragraph 5(1), in the definition of "ordinary share capital", for "section 832(1) of the Taxes Act 1988" substitute "section 989 of ITA 2007".

(4) In paragraph 7(2) for "Section 385 of the Taxes Act 1988" substitute "Section 83 of ITA 2007".

Agriculture Act 1993 (c. 37)

362 In paragraph 22(2) of Schedule 2 to the Agriculture Act 1993 (tax provisions relating to the carrying out of approved scheme of reorganisation) for "section 469 of the Income and Corporation Taxes Act 1988" substitute "the Tax Acts".

Finance Act 1994 (c. 9)

363 (1) Amend paragraph 11 of Schedule 20 to the Finance Act 1994 (changes for facilitating self-assessment etc) as follows.

(2) In sub-paragraph (3) 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 sub-paragraph (7).

Finance Act 1995 (c. 4)

364 The Finance Act 1995 is amended as follows.

365 Omit section 73 (venture capital trusts: regulations).

366 Omit section 90 (relief for post-cessation expenditure).

367 (1) Amend section 127 (persons not treated as UK representatives) as follows.

(2) In subsection (5)(b) for the words from "section 128" to "excluded income" substitute "Chapter 1 of Part 14 of the Income Tax Act 2007 (limits on liability to income tax of non-UK residents) would fall (apart from the requirements of section 819 of that Act) to be treated as disregarded income (see section 813 of that Act)".

(3) In subsection (17) for "section 839 of the Taxes Act 1988" substitute "section 993 of the Income Tax Act 2007".

368 Omit section 128 (limit on income chargeable on non-residents: income tax).

369 (1) Amend section 154 (short rotation coppice) as follows.

(2) In subsection (1)--

(a) omit "Subject to subsection (1A),", and

(b) for "Tax Acts" substitute "Corporation Tax Acts".

(3) Omit subsection (1A).

370 (1) Amend Schedule 22 (prevention of exploitation of Schedule 2 to ITTOIA 2005 (so far as relating to overlap profit)) as follows.

(2) In paragraph 5(1)(b) for the words from "section 353" to "provision)" substitute "section 383 of the Income Tax Act 2007 (relief for interest payments)".

(3) In paragraph 17--

(a) in sub-paragraph (2) for "section 839" to the end substitute "section 993 of the Income Tax Act 2007 (but as if, in subsection (4) of that section, the words from "But this subsection" to the end were omitted).", and

(b) in sub-paragraph (6)(a), in paragraph (ii) of the definition of "control", for "section 840 of that Act" substitute "section 995 of the Income Tax Act 2007".

Finance Act 1996 (c. 8)

371 The Finance Act 1996 is amended as follows.

372 In section 88A(1) (loan relationships: accounting method where rate of interest is reset) for "of Chapter 1 of Part 17" substitute "given by section 840ZA".

373 In section 91D(11) (loan relationships: condition 2 for section 91B(6)(b)) for "section 709(1)" substitute "section 840ZA".

374 (1) Amend section 97 (manufactured interest) as follows.

(2) For subsection (4) substitute--

" (4) See sections 736B(2) and 737A(5) of the Taxes Act 1988 for cases in which there is deemed to be a payment of an amount representative of interest for the purposes of this section. "

(3) In subsection (4A) for "subsection (4) above" substitute "subsection (2) of that section".

375 (1) Amend section 103 (interpretation of Chapter 2 of Part 4: loan relationships) as follows.

(2) In subsection (1), in the definition of "retail prices index", for "section 833(2) of the Taxes Act 1988" substitute "section 989 of the Income Tax Act 2007".

(3) In subsection (3B) for "section 709(1)" substitute "section 840ZA".

376 In paragraph 13 of Schedule 9 (loan relationships for unallowable purposes) for sub-paragraph (6) substitute--

" (6) In this paragraph "tax advantage" has the meaning given by section 840ZA of the Taxes Act 1988. "

Finance (No.2) Act 1997 (c. 58)

377 The Finance (No.2) Act 1997 is amended as follows.

378 Omit section 29 (unauthorised unit trusts).

379 In section 35(3)(a) (transitional relief for charities etc) for "charity" substitute "charitable company".

Finance Act 1998 (c. 36)

380 The Finance Act 1998 is amended as follows.

381 In section 56(4) (transitional provision in connection with section 55 (construction workers supplied by agencies)) for "section 385 of the Taxes Act 1988" substitute "section 83 of the Income Tax Act 2007".

382 In section 134(5) (transfer of company's assets to VCT) for "section 842AA of the Taxes Act 1988" substitute "Part 6 of the Income Tax Act 2007".

383 In section 135(5) (transfer within group to VCT) for "section 842AA of the Taxes Act 1988" substitute "Part 6 of the Income Tax Act 2007".

384 In section 161(2)(a) (non-FOTRA securities) for the words from "sections 711" to "receiving" substitute "Chapter 2 of Part 12 of the Income Tax Act 2007 (accrued income profits) in relation only to accrued income profits which a person is treated as making under section 628(5) or 630(2) of that Act".

385 (1) Amend Schedule 18 (company tax returns, assessments and related matters) as follows.

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

" (5) Sub-paragraph (1)(b) has effect as if the reference to the Corporation Tax Acts included a reference to sections 911, 912, 914 and 915 of the Income Tax Act 2007. "

(3) In paragraph 20 after sub-paragraph (3) insert--

" (4) In the application of this paragraph to an error relating to information required in a return by virtue of paragraph 3(5), this paragraph has effect as if--

(a) the reference in sub-paragraph (1) to a tax-related penalty were a reference to an amount not exceeding £3,000, and

(b) sub-paragraphs (2) and (3) were omitted. "

(4) In paragraphs 22(3)(a) and 23(3)(a) for sub-paragraph (ii) substitute--

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

Greater London Authority Act 1999 (c. 29)

386 The Greater London Authority Act 1999 is amended as follows.

387 In section 157(4) (restriction on exercise of certain powers except through a company)--

(a) in paragraph (a) omit "income tax and" and "and" at the end, and

(b) after that paragraph insert--

" (aa) section 838 of the Income Tax Act 2007 (exemption of local authorities from income tax); and " .

388 In section 419(2) (taxation: certain bodies treated as a local authority)--

(a) in paragraph (a) for "income and corporation taxes" substitute "corporation tax", and omit "and" at the end, and

(b) after that paragraph insert--

" (aa) section 838 of the Income Tax Act 2007 (exemption of local authorities from income tax); and " .

Finance Act 2000 (c. 17)

389 The Finance Act 2000 is amended as follows.

390 In section 38(4) (payroll deduction scheme) in the definition of "charity" for "that Act" in the first place where it occurs substitute "the Taxes Act 1988".

391 In section 44 (which makes provision about expenses of trustees) for subsections (4) and (5) substitute--

" (5A) This section applies if--

(a) in a year of assessment qualifying income arises under a UK settlement,

(b) the qualifying income consists of charitable income and non-charitable income, and

(c) expenses of the trustees are to be used to reduce the charitable income for the purpose of calculating a beneficiary's liability to corporation tax.

(5B) The amount of those expenses which can used for that purpose is limited to the amount allocated to the charitable income.

(5C) The amount of the expenses allocated to the charitable income is determined by apportioning them rateably between the charitable income and the non-charitable income.

(5D) In this section--

"charitable income" means income within section 628(1) or 630(1) of ITTOIA 2005,
"non-charitable income" means income which is not charitable income, and
"qualifying income" and "UK settlement" have the same meaning as in section 628 of ITTOIA 2005. "

392 (1) Amend section 46 (exemption for small trades etc) as follows.

(2) In subsection (1)--

(a) omit paragraph (a) and the "or" at the end of that paragraph, and

(b) for "charity" substitute "charitable company".

(3) In subsection (2) omit paragraph (a) and the "or" at the end of that paragraph.

(4) In subsection (2A)--

(a) in paragraph (a) for ", 790 or 804" substitute "or 790",

(b) at the end of paragraph (b) insert "and", and

(5) In subsection (3)--

(a) for "a chargeable" substitute "an accounting",

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

(d) in that paragraph for "chargeable" substitute "accounting".

(6) In subsection (4)(b)--

(a) for "charity's" substitute "charitable company's", and

(b) for "chargeable" substitute "accounting".

(7) In subsection (5) for "a chargeable" substitute "an accounting".

(8) In subsection (6)--

(a) in the appropriate place insert--

" "charitable company" means any body of persons established for charitable purposes only; " ,

(b) omit the definition of "charity",

(d) in the definition of "income"--

(i) for "charity" substitute "charitable company", and

(ii) omit paragraph (a) and the "or" at the end of that paragraph.

(9) In subsection (7) omit the words from "for the year" to "companies,".

393 In section 155 (interpretation) at the end insert "and "ITA 2007" means the Income Tax Act 2007".

394 (1) Amend Schedule 15 (the corporate venturing scheme) as follows.

(2) In paragraph 16(4) (the unquoted status requirement) after "Taxes Act 1988" insert "or section 184(3) of ITA 2007".

(3) In paragraph 55(4) (provision supplementary to paragraph 54) after "Taxes Act 1988" insert "or Part 5 of ITA 2007".

(4) In paragraph 56(3) (value received by other persons)--

(a) after "Taxes Act 1988", in the first place where it occurs, insert "or Part 5 of ITA 2007",

(b) for "section 299 of that Act" substitute "section 299 of the Taxes Act 1988 or section 209 of ITA 2007",

(c) for "section 300(2)(a) of that Act" substitute "section 300(2)(a) of the Taxes Act 1988 or section 216(2)(a) of ITA 2007", and

(d) after "section 300 of the Taxes Act 1988" insert ", section 214 of ITA 2007".

(5) In paragraph 102 (minor definitions etc) after sub-paragraph (8) insert--

" (9) References in this Schedule to Part 5 of ITA 2007 or any provision of that Part are to a Part or provision that applies only in relation to shares issued after 5 April 2007. "

395 In paragraph 41 of Schedule 22 (tonnage tax: the requirement not to enter into tax avoidance arrangements) for sub-paragraph (3) substitute--

" (3) In this paragraph "tax advantage" has the meaning given by section 840ZA of the Taxes Act 1988. "

Capital Allowances Act 2001 (c. 2)

396 The Capital Allowances Act 2001 is amended as follows.

397 (1) Amend section 4 (capital expenditure) as follows.

(2) In subsection (4) for "section 348 or 349(1) of ICTA (annual payments)" substitute "Chapter 6 of Part 15 of ITA 2007 (deduction from annual payments or patent royalties) or under section 906 of that Act (certain royalties etc where usual place of abode of owner is abroad)".

(3) Omit subsection (5).

398 In section 70V(4) (tax avoidance involving international leasing) for "Chapter 1" to the end substitute "section 840ZA of ICTA".

399 Omit section 70YI(4) (application of section 839 of ICTA).

400 In section 138(2)(b) (limit on amount deferred) for "section 385 or" substitute "section 83 of ITA 2007 or section".

401 In section 156(1)(a) and (c) (connected persons) for "section 839 of ICTA" substitute "section 575".

402 In section 220(8)(a) (allocation of expenditure to a chargeable period) omit ", within the meaning of section 840 of ICTA".

403 In section 232(1)(a) (meaning of connected person) for "section 839 of ICTA" substitute "section 575".

404 In section 258 (special leasing: income tax) after subsection (3) insert--

" (3A) The allowance or (as the case may be) the proportionate part of the allowance is given effect at Step 2 of the calculation in section 23 of ITA 2007. "

405 In section 266(5)(a) (election where predecessor and successor are connected persons) for "section 839 of ICTA" substitute "section 575".

406 In section 355 (buildings for miners etc: carry-back of allowances) after subsection (2) insert--

" (2A) For income tax purposes the allowance is given effect at Step 2 of the calculation in section 23 of ITA 2007. "

407 In section 437 (research and development allowances) for subsection (2) substitute--

" (2) In this Part "research and development"--

(a) means activities that fall to be treated as research and development in accordance with generally accepted accounting practice, and

(b) includes oil and gas exploration and appraisal.

(3) But--

(a) 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 Part, and

(b) 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 Part. "

408 In section 479 (persons having qualifying non-trade expenditure: income tax) after subsection (2) insert--

" (2A) The allowance is given effect at Step 2 of the calculation in section 23 of ITA 2007. "

409 At the beginning of Chapter 6 of Part 12 insert--

" Orders and regulations

570B Orders and regulations made by Treasury or Commissioners

(1) Any orders or regulations made by the Treasury or the Commissioners for Her Majesty's Revenue and Customs under this Act must be made by statutory instrument.

(2) Any orders or regulations made by the Treasury or the Commissioners under this Act are subject to annulment in pursuance of a resolution of the House of Commons.

(3) Subsection (2) does not apply to any regulations made under section 70YJ or any order made under section 82(4)(d). "

410 In section 574(1) at the end insert "(but, for the purposes of section 575, this definition applies only where expressly indicated)".

411 For section 575 (connected persons) substitute--

" 575 Meaning of "connected" persons

(1) For the purposes of this Act whether a person is connected with another is determined in accordance with this section unless otherwise indicated.

(2) An individual ("A") is connected with another individual ("B") if--

(a) A is B's spouse or civil partner,

(b) A is a relative of B,

(d) A is a relative of B's spouse or civil partner, or

(e) A is the spouse or civil partner of a relative of B's spouse or civil partner.

(3) A person, in the capacity as trustee of a settlement, is connected with--

(a) any individual who is a settlor in relation to the settlement,

(b) any person connected with such an individual,

(d) any non-UK resident company which, if it were UK resident, would be a close company whose participators include the trustees of the settlement,

(e) any body corporate controlled (within the meaning of section 574) by a company within paragraph or ,

(f) if the settlement is the principal settlement in relation to one or more sub-fund settlements, a person in the capacity as trustee of such a sub-fund settlement, and

(g) if the settlement is a sub-fund settlement in relation to a principal settlement, a person in the capacity as trustee of any other sub-fund settlements in relation to the principal settlement.

(4) A person who is a partner in a partnership is connected with--

(a) any partner in the partnership,

(b) the spouse or civil partner of any individual who is a partner in the partnership, and

But this subsection does not apply in relation to acquisitions or disposals of assets of the partnership pursuant to genuine commercial arrangements.

(5) A company is connected with another company if--

(a) the same person has control of both companies,

(b) a person ("A") has control of one company and persons connected with A have control of the other company,

(d) a group of two or more persons has control of both companies and the groups either consist of the same persons or could be so regarded if (in one or more cases) a member of either group were replaced by a person with whom the member is connected.

(6) A company is connected with another person ("A") if--

(a) A has control of the company, or

(b) A together with persons connected with A have control of the company.

(7) In relation to a company, any two or more persons acting together to secure or exercise control of the company are connected with--

(a) one another, and

(b) any person acting on the directions of any of them to secure or exercise control of the company.

575A Section 575: supplementary

(1) In section 575 and this section--

"company" includes any body corporate or unincorporated association, but does not include a partnership (and see also subsection (2)),
"control" is to be read in accordance with section 416 of ICTA (except where otherwise indicated),
"principal settlement" has the meaning given by paragraph 1 of Schedule 4ZA to TCGA 1992,
"relative" means brother, sister, ancestor or lineal descendant,
"settlement" has the same meaning as in Chapter 5 of Part 5 of ITTOIA 2005 (see section 620 of that Act), and
"sub-fund settlement" has the meaning given by paragraph 1 of Schedule 4ZA to TCGA 1992.

(2) For the purposes of section 575--

(a) a unit trust scheme is treated as if it were a company, and

(b) the rights of the unit holders are treated as if they were shares in the company.

(3) For the purposes of section 575 "trustee", in the case of a settlement in relation to which there would be no trustees apart from this subsection, means any person--

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

(b) in whom the management of that property is for the time being vested.

Section 466(4) of ITA 2007 does not apply for the purposes of this subsection.

(4) If any provision of section 575 provides that a person ("A") is connected with another person ("B"), it also follows that B is connected with A. "

412 In section 577(1) (other definitions)--

(a) omit the definition of "tax year", and

(b) omit the definition of "the tax year 2001-02".

413 (1) Amend Schedule 1 (abbreviations and defined expressions) as follows.

(2) In Part 1 in the appropriate place insert--

" ITA 2007

The Income Tax Act 2007. "

(3) In Part 2--

(a) in the entry for "body of persons", in the second column, before "section 832(1) of ICTA" insert "section 989 of ITA 2007 and",

(b) in the entry for "connected persons (general meaning)", in the second column, for "section 575(1)" substitute "section 575",

(c) in the entry for "offshore installation", in the second column, before "section 837C of ICTA" insert "sections 1001 and 1002 of ITA 2007 and",

(d) in the entry for "overseas property business", in the second column, at the end insert "(as applied by section 989 of ITA 2007)",

(e) in the entry for "research and development", in the second column, for "437(2) and section 837A of ICTA" substitute "437(2) and (3)",

(f) in the entry for "Schedule A business", in the second column, before "section 832(1) of ICTA" insert "section 989 of ITA 2007 and",

(g) in the entry for "tax year", in the second column, for "section 577(1)" substitute "section 4(2) of ITA 2007 (as applied by section 989 of that Act)",

(h) in the entry for "UK property business", in the second column, omit "section 832(1) of ICTA and" and at the end insert "(as applied by section 989 of ITA 2007)",

(i) in the entry for "United Kingdom", in the second column, for "section 830 of ICTA and section 41 of ITEPA 2003" substitute "section 1013 of ITA 2007 and section 830(1) of ICTA", and

(j) in the entry for "within the charge to tax", in the second column, before "section 832(1) of ICTA" insert "section 1009 of ITA 2007 and".

Finance Act 2002 (c. 23)

414 The Finance Act 2002 is amended as follows.

415 Omit section 98.

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