Income Tax Act 2007 (c. 3)

(The document as of February, 2008)

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131 If a tribunal has made a determination under section 705(3) of ICTA (determination on rehearing of appeal against notice under section 703 of ICTA) within 30 days before 6 April 2007, the appellant or an officer of Revenue and Customs may require the tribunal to state and sign a case under section 707(2) of this Act, despite not having declared dissatisfaction with the determination.

Transactions in securities: appeals to House of Lords

132 (1) This paragraph applies until paragraph 47 of Schedule 9 to the Constitutional Reform Act 2005 (c. 4) comes into force.

(2) Section 710 has effect until that time as if--

(a) references in subsections (1), (2) and (4) to the Supreme Court were references to the House of Lords, and

(b) in subsection (3) the words "unless leave has been given under and in accordance with section 1 of the Administration of Justice (Appeals) Act 1934" were substituted for the words "except with the leave of the Court of Appeal or the Supreme Court".

(3) Section 711(4) has effect until that time as if the reference to the Supreme Court were a reference to the House of Lords.

Transfers of assets abroad: non-transferors receiving benefit- exclusion of income arising before 10 March 1981

133 (1) Section 732 (non-transferors receiving a benefit as a result of relevant transactions) applies whenever the relevant transfer referred to in that section took place.

(2) But the relevant income referred to in section 733(1) (by reference to which the amount of income treated as arising under section 732 is determined) does not include income that arose before 10 March 1981.

Transfers of assets abroad: whether trustees are "persons abroad"

134 (1) This paragraph deals with whether section 475 (residence of trustees) applies in determining if the single person mentioned in section 474 is a person abroad (as defined in section 718) for the purposes of sections 727 to 730 (charge where individuals receive capital sums as a result of transfers of assets abroad etc) (and accordingly whether section 718(2)(b) applies for those purposes).

(2) Section 475 does not apply for the purposes of sections 727 to 730 in relation to income payable before 15 June 1989.

(3) Section 475 does not apply for the purposes of sections 727 to 730 in relation to income payable on or after 15 June 1989 if--

(a) the individual received or became entitled to receive the capital sum mentioned in section 729(1) before that date, and

(b) the capital sum was wholly repaid or the right to it waived before 1 October 1989.

(4) In sub-paragraph (3) "capital sum" has the meaning given in section 729, and subsection (4) of that section applies for the purposes of that sub-paragraph as it applies for the purposes of section 729(1).

135 (1) Sub-paragraph (2) deals with whether section 474 (trustees of settlement to be treated as a single and distinct person) and section 475 (residence of trustees) apply for the purposes of sections 731 to 735 (charge where benefit received) (and accordingly whether section 718(2)(b) applies for those purposes).

(2) Sections 474 and 475 do not apply for the purposes of sections 731 to 735 in relation to benefits received before 15 June 1989.

(3) Sub-paragraphs (4) and (5) apply for the purposes of section 733 (income charged under section 731) in finding the amount of income treated as arising under section 732(2) in respect of benefits received on or after 15 June 1989.

(4) In determining the relevant income of an earlier tax year for the purposes of section 733(1) (see Step 4), income that arose to the trustees of a settlement before 6 April 1989 is treated as arising to persons abroad if one or more of the trustees were resident outside the United Kingdom, even though one or more were not so resident.

(5) But sub-paragraph (4) does not apply if the trustees have been charged to tax on that income.

Transfers of assets abroad: whether personal representatives are "persons abroad"

136 (1) This paragraph deals with whether section 834 (residence of personal representatives) applies in determining if personal representatives are persons abroad (as defined in section 718) for the purposes of sections 727 to 730 (charge where individuals receive capital sums as a result of transfers of assets abroad etc) (and accordingly whether section 718(2)(c) applies for those purposes).

(2) Section 834 does not apply for the purposes of sections 727 to 730 in relation to income payable before 15 June 1989.

(3) Section 834 does not apply for the purposes of sections 727 to 730 in relation to income payable on or after 15 June 1989 if--

(a) the individual received or became entitled to receive the capital sum mentioned in section 729(1) before that date, and

(b) the capital sum was wholly repaid or the right to it waived before 1 October 1989.

137 (1) Sub-paragraph (2) deals with whether section 834 (residence of personal representatives) applies for the purposes of sections 731 to 735 (charge where individuals receive a benefit as a result of transfers of assets abroad etc) (and accordingly whether section 718(2)(c) applies for those purposes).

(2) Section 834 does not apply for the purposes of sections 731 to 735 in relation to benefits received before 15 June 1989.

(4) In determining the relevant income of an earlier tax year for the purposes of section 733(1) (see Step 4), income that arose to personal representatives before 6 April 1989 is treated as arising to persons abroad if one or more of them were resident outside the United Kingdom, even though one or more were not so resident.

(5) But sub-paragraph (4) does not apply if the personal representatives have been charged to tax on that income.

Transfers of assets abroad: company residence for transfers between 20 March 1990 and 29 November 1993

138 (1) In relation to transfers and associated operations on or after 20 March 1990 and before 30 November 1993, a body corporate regarded as resident in a territory outside the United Kingdom for the purposes of any double taxation arrangements is treated as if it were resident outside the United Kingdom for the purposes of Chapter 2 of Part 13 (transfer of assets abroad).

(2) In this paragraph "transfers" and "associated operations" have the same meaning as in Chapter 2 of Part 13 (see sections 716 and 719 respectively).

Transfers of assets abroad: information powers concerning transfers between 20 March 1990 and 29 November 1993 involving companies

139 (1) So far as section 749(6) (restrictions on information to be provided under section 748) applies for the purposes of section 749(2) or (3), it applies in relation to transfers and associated operations on or after 20 March 1990 and before 30 November 1993 with the modification specified in sub-paragraph (2).

(2) The modification is that the reference to bodies corporate resident outside the United Kingdom includes a reference to bodies corporate regarded as resident in a territory outside the United Kingdom for the purposes of any double taxation arrangements.

Transfers of assets abroad: income arising before 26 November 1996

140 Sections 721(5)(b) and (c) and 728(3)(b) and (c) do not apply if the income arose before 26 November 1996.

Transfers of assets abroad: meaning of "associated operation" and consideration of associated operations alone

141 (1) In relation to any time before 5 December 2005, the reference in section 716(1)(b) (meaning of "relevant transfer") to income which becomes payable to a person abroad does not include income that becomes so payable just as a result of one or more associated operations.

(2) In relation to any time before 5 December 2005, section 719 (meaning of "associated operation") applies as if subsection (2) were omitted.

(3) In relation to any time before 5 December 2005, the reference in section 721(2) (individuals with power to enjoy income as a result of relevant transactions) to income which an individual has power to enjoy does not include income which the individual has power to enjoy just as a result of one or more associated operations.

(4) In relation to any time before 5 December 2005, the reference in section 728(1)(a) (individuals receiving capital sums as a result of relevant transactions) to income which has become the income of a person abroad does not include income that has become such income just as a result of one or more associated operations.

(5) In this paragraph--

(a) "associated operation" has the meaning given in section 719, and

(b) references to power to enjoy income are to be read in accordance with section 722 (when an individual has power to enjoy income of a person abroad).

Individuals in partnership: recovery of excess relief

142 In section 792(1)--

(a) the reference to the claiming of relief includes a reference to the claiming of relief as mentioned in section 74(1)(a) and (b) of FA 2005, and

(b) the reference to sections 104, 107 and 110 includes a reference to section 117 of ICTA (including as applied by section 118ZB of that Act) and section 118ZE of that Act.

143 (1) The losses covered by section 794(1) and (2) in relation to a trade include losses within section 74(5) of FA 2005 made in the trade.

(2) The income covered by section 794(3) includes amounts treated as received as a result of the application of section 74 of FA 2005.

(3) Sub-paragraph (4) applies for the purposes of section 794(5) if, as a result of paragraph 142(b), the relevant restriction provision would be section 117 of ICTA (including as applied by section 118ZB of that Act) or section 118ZE of that Act.

(4) The relevant restriction provision is instead taken to be--

(a) in the case of section 117 of ICTA (other than as applied by section 118ZB of that Act), section 104,

(b) in the case of section 117 of ICTA (as applied by section 118ZB of that Act), section 107, and

(5) In section 794(6) the reference to subsection (2)(b) includes a reference to section 74(11)(b) of FA 2005.

Individuals claiming relief for film-related trading losses

144 (1) The claims covered by section 797(1)(a) include claims within section 119(1)(a) of FA 2004.

(2) For the purposes of section 797--

(a) a "relevant disposal" does not include a disposal which was made before 10 December 2003, and

(b) an event occurring before the tax year 2007-08 is an "exit event" if (and only if) it is an "exit event" for the purposes of section 119 of FA 2004.

145 (1) The losses covered by section 800(3)(a) include losses in relation to which a claim is made as mentioned in section 121(1)(a) or (b) of FA 2004.

(2) The income covered by section 800(5) includes amounts treated as received as a result of the application of section 74 of FA 2005.

(3) The losses covered by section 800(6) in relation to a trade include losses within section 121(1A)(b) of FA 2004 made in the trade.

(4) In section 800(9) the reference to the making of a claim includes a reference to the making of a claim as mentioned in section 122A(1) of FA 2004.

146 In section 801(3) the reference to the making of a claim includes a reference to the making of a claim as mentioned in section 122A(1) of FA 2004.

147 (1) In section 802(1) the reference to the making of a claim includes a reference to the making of a claim as mentioned in section 122A(1) of FA 2004.

(2) The repeal by this Act of section 122A of FA 2004 (or any provision inserting or amending, or affecting the application of, that section) does not affect the power of the Commissioners for Her Majesty's Revenue and Customs to make regulations under that section having effect before the tax year 2007-08.

148 (1) After the commencement of section 802, the Partnerships (Restrictions on Contributions to a Trade) Regulations 2006 (S.I. 2006/1639) have effect as if made under that section.

(2) The Regulations so have effect subject to the following modifications.

(3) They have effect as if in regulation 2--

(a) for the definition of "ICTA" there were substituted--

" "ITA 2007" means the Income Tax Act 2007; " , and

(b) for the definition of "relevant individual" there were substituted--

" "relevant individual" means--

(a) a limited partner (within the meaning given by section 106 of ITA 2007),

(b) a member of a limited liability partnership, or

where the partnership carries on a trade in which the individual makes a film-related loss (as defined in section 800(2) of ITA 2007) for which the individual makes a claim as mentioned in section 802(1) of that Act; " .

(4) They have effect as if in regulation 3(a) for "section 120 of the Finance Act 2004" there were substituted "section 799 of ITA 2007".

(5) They have effect as if in regulation 4--

(a) for "contribution to the trade", wherever occurring, there were substituted "capital contribution",

(b) for "section 119(2)(b) or (c) of the Finance Act 2004", wherever occurring, there were substituted "section 797(2)(b) of ITA 2007", and

" (ii) the amount of income treated as received in accordance with section 797(5) of that Act. "

(6) See paragraph 35 of this Schedule for provision about the effect of the Partnerships (Restrictions on Contributions to a Trade) Regulations 2005 (S.I. 2005/2017) after the commencement of section 802.

149 (1) In section 803 references to chargeable events include events that are chargeable events for the purposes of section 119 of FA 2004.

(2) Accordingly, the total amount of income mentioned in section 803(3) is to include any income treated as received as a result of section 119(5)(b) of FA 2004.

Individuals in partnership: exit charge

150 (1) The losses covered by section 805(1)(b) include losses in relation to which a claim is made as mentioned in section 126(1)(c) of FA 2004.

(2) The disposals covered by section 805(2)(a) and (b) do not include disposals made before 10 February 2004.

151 (1) In section 806 at Step 4 non-taxable consideration received before 10 February 2004 is excluded.

(2) In section 806 at Step 5--

(a) the reference to section 805 includes a reference to section 127 of FA 2004, and

(b) the reference to chargeable events includes a reference to chargeable events for the purposes of section 127 of FA 2004.

152 (1) This paragraph applies for the purposes of sections 805 to 807 if the individual carried on the trade at any time before 26 March 2004.

(2) Any reference to expenditure incurred in the trade in exploiting the licence does not include expenditure incurred before 10 February 2004.

153 The losses covered by section 807(4) include losses in relation to which a claim has been made as mentioned in section 128(2)(a) or (b) of FA 2004.

Part 15 Deduction of income tax at source

Deduction by deposit-takers: discretionary or accumulation settlements

154 (1) A deposit with a deposit-taker which meets the settlement condition in section 856(6) is not a relevant investment for the purposes of Chapter 2 of Part 15 if conditions A and B are met in relation to the deposit.

(2) Condition A is that the deposit was made before 6 April 1995.

(3) Condition B is that neither an officer of Revenue and Customs nor any trustee of the settlement has notified the deposit-taker that the deposit meets the settlement condition in section 856(6).

155 (1) A notification under paragraph 154(3) given by a trustee must be in the form provided by the Commissioners for Her Majesty's Revenue and Customs.

(2) A deposit-taker is entitled not to deduct a sum representing income tax under section 851 from a payment of interest on a deposit covered by a notification under paragraph 154(3) if sub-paragraph (3) applies to the payment.

(3) This sub-paragraph applies to a payment if--

(a) it is made within 30 days after the date when the deposit-taker receives the notification, and

(b) at the time it is made, it is not reasonably practicable for the deposit-taker to deduct a sum representing income tax from the payment.

(4) If an officer of Revenue and Customs is satisfied that a deposit covered by a notification under paragraph 154(3) does not meet the settlement condition in section 856(6), the officer must--

(a) cancel the notification, and

(b) give notice of the cancellation to the deposit-taker concerned.

(5) An officer of Revenue and Customs may give notice to a trustee of a settlement requiring the trustees to provide--

(a) information about any notification given by a trustee under paragraph 154(3), and

(b) such information as the officer may reasonably require for the purposes of giving a notification under that paragraph about interest to which the trustees are entitled.

(6) For the purposes of this paragraph crediting interest counts as paying it.

Deduction by deposit-takers and building societies: declarations of non-UK residence

156 (1) Section 858(2)(c) (which requires a declaration of non-UK residence in respect of an individual or individuals beneficially entitled to interest to contain the name and address of the individual or individuals concerned) does not apply to a declaration made before 6 April 2001.

(2) Section 859(2)(c) (which requires a declaration of non-UK residence in respect of a Scottish partnership beneficially entitled to interest to contain the name and address of the partners) does not apply to a declaration made before 6 April 2001.

Deduction by deposit-takers: qualifying certificates of deposit

157 (1) This paragraph applies to a certificate of deposit which was issued by a deposit-taker before 13 March 1984 on terms which provide for interest to be payable on the deposit at any time after 5 April 1985 (whether or not interest is payable on it before that date).

(2) The certificate of deposit is to be treated as a qualifying certificate of deposit for the purposes of section 865.

Deduction by deposit-takers: qualifying time deposits

158 (1) This paragraph applies to a deposit with a deposit-taker which--

(a) was made before 6 July 1984, and

(b) meets the condition in sub-paragraph (2).

(2) The condition is that the deposit is made on terms which--

(a) do not make provision for the transfer of the right to repayment,

(b) prevent partial withdrawals of, or additions to, the deposit, and

(i) to repay the sum at the end of a specified period ending after 5 April 1985, or

(ii) if interest is payable only when the deposit is repaid, to repay the sum on demand or on notice.

(3) The deposit is to be treated as a qualifying time deposit for the purposes of section 866.

Deduction by deposit-takers and building societies: saving for regulations

159 (1) This paragraph applies to regulations which--

(a) were made under section 477A(1) to (2A) of ICTA (building societies: regulations for deduction of tax),

(b) were in force immediately before the commencement of the repeal of those provisions by this Act, and

(c) could have been made under section 17 of TMA 1970 as amended by this Act, if those amendments had been in force at the time the regulations were made.

(2) The regulations have effect after the commencement of the repeal of section 477A(1) to (2A) of ICTA as if made under section 17 of TMA 1970 as amended by this Act.

160 (1) This paragraph applies to regulations about the making of declarations to building societies which--

(a) were made under section 477A(1) to (2A) of ICTA,

(b) were in force immediately before the commencement of the repeal of those provisions by this Act, and

(c) could have been made under section 132 or 133 of FA 1999 (electronic communications), if provision about the making of declarations to building societies had precluded to any extent the use of electronic communications for that purpose at the time that the regulations were made.

(2) The regulations have effect after the commencement of the repeal of section 477A(1) to (2A) of ICTA as if made under section 132 and 133 of FA 1999.

(3) Regulations under sections 132 and 133 of FA 1999 may make any provision in relation to Chapter 2 of Part 15 of this Act which they could have made if that Chapter had come into force before those sections.

Deduction by deposit-takers, building societies etc: collection of tax

161 Chapter 15 of Part 15 has effect for return periods which--

(a) fall within accounting periods ending on or after 6 April 2007, and

(b) end on or after that date.

162 (1) This paragraph applies to a payment--

(a) which is made in an accounting period beginning before 6 April 2007 and ending on or after that date, and

(b) which was made before 6 April 2007, but which would have been a payment within section 946 if it had been made on or after that date.

(2) A payment to which this paragraph applies is to be treated as a payment within section 946 if it is made in a return period which--

(a) falls within the accounting period,

(b) begins before 6 April 2007, and

(3) In addition, a payment to which this paragraph applies which was made in an earlier return period which falls within the accounting period is to be treated as a payment within section 946.

Deduction from certain payments of yearly interest: interest paid by banks

163 (1) In the case of payments of interest to which this paragraph applies, section 878 (exceptions from duty to deduct: interest paid by banks) has effect with the modification in sub-paragraph (2).

(2) The modification is the substitution for subsections (1) and (2) of that section of "The duty to deduct a sum representing income tax under section 874 does not apply to a payment of interest by a bank carrying on a genuine banking business in the United Kingdom."

(3) This paragraph applies to interest payable on an advance made before 29 April 1996.

Deduction from certain payments of yearly interest: interest paid on advances from banks

164 (1) In the case of payments of interest to which this paragraph applies, section 879 (exceptions from duty to deduct: interest paid on advances from banks) has effect with the modification in sub-paragraph (2).

(2) The modification is the substitution for subsections (1) to (4) of that section of "The duty to deduct a sum representing income tax under section 874 does not apply to a payment of interest in the United Kingdom on an advance from a bank carrying on a genuine banking business in the United Kingdom."

(3) This paragraph applies to interest payable before 29 April 1996.

(4) In the case of an institution which--

(a) immediately before 29 April 1996 was not treated for the purposes of section 349(3)(a) of ICTA as a bank carrying on a genuine banking business in the United Kingdom, and

(b) on that day fell within the definition of "bank" given by section 840A of ICTA,

this paragraph applies to interest payable on an advance made before that day.

(5) In the case of an institution which--

(a) immediately before 29 April 1996 was treated for the purposes of section 349(3)(a) of ICTA as a bank carrying on a genuine banking business in the United Kingdom, and

(b) on that day did not fall within the definition of "bank" given by section 840A(1) of ICTA,

this paragraph applies to the interest mentioned in sub-paragraph (6).

(6) That interest is any interest payable on an advance made before 29 April 1996, if at the time when the interest is paid the person beneficially entitled to the interest is within the charge to corporation tax as respects the interest.

Deduction from certain UK public revenue dividends

165 (1) This paragraph applies if--

(a) any person holds any gilt-edged securities in relation to which a direction was given under section 50(1) of ICTA at any time before 6 April 1998, and

(b) that person at any time before that date made an application under section 50(2) of that Act with respect to those securities.

(2) The person is treated as having made a deduction at source application under section 895 in respect of the securities which (unless withdrawn) is treated as having effect from that date.

166 (1) This paragraph applies in relation to any gilt-edged securities issued before 6 April 1998 which--

(a) are securities the interest on which, if paid immediately before that date, would have fallen to be paid after deduction of income tax, and

(b) are registered within the meaning of section 895 but are not securities in relation to which any direction under section 50 of ICTA was given before that date.

(2) Chapter 5 of Part 15 has effect as if the appropriate person had made a deduction at source application under section 895 in respect of the securities so as to enable that application to have effect from (and including) that date.

(3) In sub-paragraph (2) "the appropriate person" means--

(a) in the case of securities transferred before 6 April 1998 but after the time when the balance was struck for a dividend on them falling due on or after that date, the person who held the securities at the time when the balance was struck,

(b) in any other case, the person holding the securities in question immediately before 6 April 1998.

Unauthorised unit trusts: calculation of trustees' income pool

167 (1) This paragraph applies for the purposes of section 943.

(2) The amount of any trustees' income pool as at the start of the tax year 2007-08 is an amount equal to what would have been the trustees' uncredited surplus for the tax year 2007-08 apart from this Act had section 469(5A) to (5D) of ICTA applied in relation to the trustees for the tax year 2007-08.

168 (1) This paragraph applies for the purposes of section 943 in its application to any trustees if--

(a) the current tax year is a tax year subsequent to the tax year 2007-08,

(b) subsection (3) of section 943 does not apply, and

(c) the last tax year prior to the current tax year for which the trustees were UK resident is a tax year prior to the tax year 2007-08.

(2) The amount of the trustees' income pool as at the start of the current tax year is an amount equal to what would have been the trustees' uncredited surplus for the tax year 2007-08 apart from this Act had section 469(5A) to (5D) of ICTA applied in relation to the trustees for the tax year 2007-08.

Non-resident landlords

169 (1) Sub-paragraph (2) applies to any references in the Taxation of Income from Land (Non-residents) Regulations 1995 (S.I. 1995/2902) to payments to be made to the Board in respect of tax that is or may become chargeable as the income from a business of a non-resident (as defined in those regulations).

(2) On and after 6 April 2007 those references are to be read as references to income tax to be paid to the Commissioners for Her Majesty's Revenue and Customs in respect of non-resident landlord income (as defined in section 971(2)).

Interpretation

170 Expressions used in this Part of this Schedule and in Part 15 have the same meaning as they have in Part 15.

Part 16 Other provisions

Old references to surtax and standard rate tax

171 The repeal by this Act of section 819 of ICTA has no effect in relation to any instrument (of whatever nature), will or codicil made before the date on which this Act comes into force.

Section 820 of ICTA

172 Section 820 of ICTA (application of Income Tax Acts from year to year) applies to this Act as if this Act were in force on the day before 6 April 2007.

Section 1031

SCHEDULE 3 Repeals and revocations

Part 1 Repeals and revocations: general

Reference

Extent of repeal or revocation

Taxes Management Act 1970 (c. 9)

In section 12AB(1)(a), sub-paragraph (iv) and the "and" immediately before it.

In section 42(7)--

(a)

in paragraph (a), the word "723(3),", and

(b)

the word "and" at the end of paragraph (d).

In section 46C(1)(b) and (3), the words "of the principal Act".

Section 55(1)(c).

Section 98(4C).

In the first column of the Table in section 98--

(a)

the entry relating to regulations under section 42A of ICTA,

(b)

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

(c)

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

(d)

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

(e)

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

(f)

the entry relating to section 483 of ICTA,

(g)

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

(h)

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

(i)

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

(j)

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

(k)

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

(l)

the entry relating to regulations under Schedule 33 to FA 2002.

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