Office of Public Sector Information
SCHEDULE 1 continued PART 2 continued
436 In section 357(2) after “section 505(1)(e) of ICTA” insert “or section 524 of ITA 2007”.
437 After section 404 insert—
(1) A payment or other benefit which counts as a person’s employment income as a result of section 403 is treated as the highest part of the person’s total income.
(2) Subsection (1) has effect for all income tax purposes except the purposes of sections 535 to 537 of ITTOIA 2005 (gains from contracts for life insurance etc: top slicing relief).
(3) See section 1012 of ITA 2007 (relationship between highest part rules) for the relationship between—
(a) the rule in subsection (1), and
(b) other rules requiring particular income to be treated as the highest part of a person’s total income.”
438 In section 476 (charge on occurrence of chargeable event) after subsection (5) insert—
“(5A) An amount charged under subsection (5)(a) is treated for income tax purposes as an amount of income.”
439 (1) Amend section 515 (tax advantages and charges relating to SIPs) as follows.
(2) In subsection (1)—
(a) for “provisions of ICTA relate” substitute “provision of ICTA relates”, and
(b) omit paragraph (b) and the “and” immediately after it.
(3) In subsection (2)—
(a) omit the “and” immediately after paragraph (b), and
(b) after paragraph (c) insert “, and
(d) Chapter 5 of Part 9 of ITA 2007 (which provides for section 479 of that Act not to apply to income of the trustees of an approved SIP in certain circumstances)”.
(4) Omit subsection (3).
440 (1) Amend section 555 (deduction for liabilities related to former employment) as follows.
(2) In subsection (2)—
(a) for “when computing the former employee’s total income” substitute “in calculating the former employee’s net income”, and
(b) at the end insert “(see Step 2 of the calculation in section 23 of ITA 2007)”.
(3) For subsection (6) substitute—
“(6) See section 263ZA of TCGA 1992 for relief from capital gains tax where the amount of the deduction allowed under this section exceeds the remaining total income (as defined in that section).”
(4) In the sidenote for “from total income” substitute “in calculating net income”.
(5) In the italic cross-heading before the section for “from total income” substitute “in calculating net income”.
441 In section 609(1) after “section 273 of ICTA” insert “or section 459 of ITA 2007”.
442 In section 718 (connected persons) for “Section 839 of ICTA” substitute “Section 993 of ITA 2007”.
443 In section 719 (control in relation to a body corporate)—
(a) for “Section 840 of ICTA (meaning of control in relation to a body corporate)” substitute “Section 995 of ITA 2007 (meaning of “control”)”, and
(b) for the sidenote substitute “Meaning of “control””.
444 (1) Amend section 721 (other definitions) as follows.
(2) In subsection (1)—
(a) after the definition of “foreign employer” insert “and”, and
(b) omit the words after the definition of “non-cash voucher”.
(3) Omit subsection (2).
445 In Part 1 of Schedule 1 (abbreviations) in the appropriate place insert—
| “ITA 2007 | The Income Tax Act 2007.” |
446 (1) Amend Part 2 of Schedule 1 (defined expressions) as follows.
(2) In the entry for “assignment (in the application of the Act to Scotland)”, in the second column, for “section 721(2)” substitute “section 1008(1) of ITA 2007”.
(3) In the entry for “basic rate”, in the second column, for “section 832(1) of ICTA” substitute “section 6(2) of ITA 2007 (as applied by section 989 of that Act)”.
(4) In the entry for “body of persons”, in the second column, for “section 832(1) of ICTA” substitute “section 989 of ITA 2007”.
(5) In the entry for “capital allowance”, in the second column, for “section 832(1) of ICTA” substitute “section 989 of ITA 2007”.
(6) In the entry for “child, children”, in the second column, omit “section 832(5) of ICTA, and see”.
(7) In the entry for “close company”, in the second column, for “section 832(1) of ICTA” substitute “section 989 of ITA 2007”.
(8) In the entry for “company”, in the second column, for “section 832(1) of ICTA” substitute “section 992 of ITA 2007”.
(9) In the entry for “connected”, in the second column, for “section 839 of ICTA” substitute “section 993 of ITA 2007”.
(10) In the entry for “control”, in the second column, for “section 840 of ICTA” substitute “section 995 of ITA 2007”.
(11) In the entry for “distribution”, in the second column, for “section 832(1) of ICTA” substitute “section 989 of ITA 2007”.
(12) In the entry for “generally accepted accounting practice”, in the second column, for “section 832(1) of ICTA” substitute “section 997 of ITA 2007”.
(13) Omit the entry for “interest”.
(14) In the entry for “local authority”, in the second column, for “section 842A of ICTA” substitute “section 999 of ITA 2007”.
(15) After the entry for “national insurance contributions” insert—
| “net income | section 23 of ITA 2007 (as applied by section 989 of that Act)” |
(16) In the entry for “the normal self-assessment filing date”, in the second column, for “section 721(1)” substitute “section 989 of ITA 2007”.
(17) In the entry for “notice”, in the second column, for “section 832(1) of ICTA” substitute “section 989 of ITA 2007”.
(18) In the entry for “offshore installation”, in the second column, for “section 837C of ICTA” substitute “sections 1001 and 1002 of ITA 2007”.
(19) In the entry for “ordinary share capital”, in the second column, for “section 832(1) of ICTA” substitute “section 989 of ITA 2007”.
(20) In the entry for “personal representatives”, in the second column, for “section 721(1)” substitute “section 989 of ITA 2007”.
(21) In the entry for “recognised stock exchange”, in the second column, for “section 841 of ICTA” substitute “section 1005 of ITA 2007”.
(22) In the entry for “registered pension scheme”, in the second column, for “section 832(1) of ICTA” substitute “section 150(2) of FA 2004 (as applied by section 989 of ITA 2007)”.
(23) In the entry for “Schedule A business”, in the second column, for “section 832(1) of ICTA” substitute “section 989 of ITA 2007”.
(24) In the entry for “stepchild”, in the second column, for “section 832(1) of ICTA” substitute “section 246 of the Civil Partnership Act 2004 (as applied by section 989 of ITA 2007)”.
(25) In the entry for “51% subsidiary”, in the second column, for “section 838(1) of ICTA” substitute “section 989 of ITA 2007”.
(26) In the entry for “tax”, in the second column, at the end insert “(as applied by section 989 of ITA 2007)”.
(27) In the entry for “tax credit”, in the second column, for “section 832(1) of ICTA” substitute “section 397(1) of ITTOIA 2005 (as applied by section 989 of ITA 2007)”.
(28) In the entry for “tax year”, in the second column, for “section 721(1)” substitute “section 4(2) of ITA 2007 (as applied by section 989 of that Act)”.
(29) In the entry for “the tax year 2003-04 etc”, in the second column, for “section 721(1)” substitute “section 4(4) of ITA 2007 (as applied by section 989 of that Act)”.
(30) In the entry for “total income” for “section 835 of ICTA” substitute “section 23 of ITA 2007 (as applied by section 989 of that Act)”.
(31) In the entry for “trade”, in the second column, for “section 832(1) of ICTA” substitute “section 989 of ITA 2007”.
(32) In the entry for “United Kingdom”, in the second column, for “section 830 of ICTA” substitute “section 1013 of ITA 2007”.
(33) 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)”.
447 (1) Amend Schedule 2 (approved share incentive plans) as follows.
(2) In paragraph 49(3)—
(a) in paragraph (a) for “section 840A(1)(b) of ICTA” substitute “section 991(2)(b) of ITA 2007”, and
(b) in paragraph (c) for “section 840A(1)(c) of ICTA” substitute “section 991(2)(c) of ITA 2007”.
(3) In paragraph 100—
(a) in the entry for “building society”, in the second column, for “section 832(1) of ICTA” substitute “section 989 of ITA 2007”,
(b) in the entry for “child”, in the second column, for “section 832(5) of ICTA (and see section 721(6))” substitute “section 721(6)”,
(c) in the entry for “close company”, in the second column, for “section 832(1) of ICTA” substitute “section 989 of ITA 2007”,
(d) in the entry for “distribution”, in the second column, for “section 832(1) of ICTA” substitute “section 989 of ITA 2007”,
(e) in the entry for “notice”, in the second column, for “section 832(1) of ICTA” substitute “section 989 of ITA 2007”,
(f) in the entry for “ordinary share capital”, in the second column, for “section 832(1) of ICTA” substitute “section 989 of ITA 2007”,
(g) in the entry for “personal representatives”, in the second column, for “section 721(1)” substitute “section 989 of ITA 2007”,
(h) in the entry for “recognised stock exchange”, in the second column, for “section 841 of ICTA” substitute “section 1005 of ITA 2007”,
(i) in the entry for “tax”, in the second column, at the end insert “(as applied by section 989 of ITA 2007)”, and
(j) in the entry for “tax year”, in the second column, for “section 721(1)” substitute “section 4(2) of ITA 2007 (as applied by section 989 of that Act)”.
448 In paragraph 49 of Schedule 3 (approved SAYE Option Schemes)—
(a) in the entry for “child”, in the second column, for “section 832(5) of ICTA (and see section 721(6) of this Act)” substitute “section 721(6)”,
(b) in the entry for “close company”, in the second column, for “section 832(1) of ICTA” substitute “section 989 of ITA 2007”,
(c) in the entry for “distribution”, in the second column, for “section 832(1) of ICTA” substitute “section 989 of ITA 2007”,
(d) omit the entry for “interest”,
(e) in the entry for “notice”, in the second column, for “section 832(1) of ICTA” substitute “section 989 of ITA 2007”,
(f) in the entry for “ordinary share capital”, in the second column, for “section 832(1) of ICTA” substitute “section 989 of ITA 2007”,
(g) in the entry for “personal representatives”, in the second column, for “section 721(1)” substitute “section 989 of ITA 2007”,
(h) in the entry for “recognised stock exchange”, in the second column, for “section 841 of ICTA” substitute “section 1005 of ITA 2007”,
(i) in the entry for “tax”, in the second column, at the end insert “(as applied by section 989 of ITA 2007)”, and
(j) omit the entry for “United Kingdom”.
449 In paragraph 37 of Schedule 4 (approved CSOP Schemes)—
(a) in the entry for “child”, in the second column, for “section 832(5) of ICTA (and see section 721(6) of this Act)” substitute “section 721(6)”,
(b) in the entry for “close company”, in the second column, for “section 832(1) of ICTA” substitute “section 989 of ITA 2007”,
(c) in the entry for “distribution”, in the second column, for “section 832(1) of ICTA” substitute “section 989 of ITA 2007”,
(d) in the entry for “notice”, in the second column, for “section 832(1) of ICTA” substitute “section 989 of ITA 2007”,
(e) in the entry for “ordinary share capital”, in the second column, for “section 832(1) of ICTA” substitute “section 989 of ITA 2007”,
(f) in the entry for “personal representatives”, in the second column, for “section 721(1)” substitute “section 989 of ITA 2007”,
(g) in the entry for “recognised stock exchange”, in the second column, for “section 841 of ICTA” substitute “section 1005 of ITA 2007”, and
(h) omit the entry for “United Kingdom”.
450 (1) Amend Schedule 5 (enterprise management incentives) as follows.
(2) In paragraph 11(10) (meaning of “qualifying subsidiary”)—
(a) for “section 312(2A) of ICTA” substitute “section 252 of ITA 2007”, and
(b) for “Chapter 3 of Part 7 of ICTA” substitute “Part 5 of ITA 2007”.
(3) In paragraph 58, in the definition of “research and development”, for “section 837A of ICTA” substitute “section 1006 of ITA 2007”.
(4) In paragraph 59—
(a) in the entry for “child”, in the second column, for “section 832(5) of ICTA (and see section 721(6) of this Act)” substitute “section 721(6)”,
(b) in the entry for “close company”, in the second column, for “section 832(1) of ICTA” substitute “section 989 of ITA 2007”,
(c) in the entry for “distribution”, in the second column, for “section 832(1) of ICTA” substitute “section 989 of ITA 2007”,
(d) in the entry for “farming”, in the second column, for “section 832(1) of ICTA” substitute “section 996 of ITA 2007”,
(e) in the entry for “generally accepted accounting practice”, in the second column, for “section 50(1) of the Finance Act 2004” substitute “section 997 of ITA 2007”,
(f) in the entry for “notice”, in the second column, for “section 832(1) of ICTA” substitute “section 989 of ITA 2007”,
(g) in the entry for “offshore installation”, in the second column, for “section 837C of ICTA” substitute “sections 1001 and 1002 of ITA 2007”,
(h) in the entry for “ordinary share capital”, in the second column, for “section 832(1) of ICTA” substitute “section 989 of ITA 2007”,
(i) in the entry for “personal representatives”, in the second column, for “section 721(1)” substitute “section 989 of ITA 2007”,
(j) in the entry for “51% subsidiary”, in the second column, for “section 838(1) of ICTA” substitute “section 989 of ITA 2007”,
(k) in the entry for “tax”, in the second column, at the end insert “(as applied by section 989 of ITA 2007)”,
(l) in the entry for “tax year”, in the second column, for “section 721(1)” substitute “section 4(2) of ITA 2007 (as applied by section 989 of that Act)”,
(m) in the entry for “trade”, in the second column, for “section 832(1) of ICTA” substitute “section 989 of ITA 2007”, and
(n) in the entry for “United Kingdom”, in the second column, for “section 830 of ICTA” substitute “section 1013 of ITA 2007”.
451 The Finance Act 2003 is amended as follows.
452 Omit section 151 (non-resident companies: extent of charge to income tax).
453 In section 152 (non-resident companies: transactions carried out through broker, investment manager or Lloyd’s agent) omit paragraph (b) and the word “and” before it.
454 In section 153(2)(a) (general replacement of references to branch or agency of company) for “paragraphs 3 and 4” substitute “paragraph 4”.
455 In paragraph 1(2) of Schedule 26 (non-resident companies: transactions through broker, investment manager or Lloyd’s agent) omit paragraph (b) and the word “and” before it.
456 The Finance Act 2004 is amended as follows.
457 In section 50 (generally accepted accounting practice) for “the Tax Acts” wherever occurring substitute “the Corporation Tax Acts”.
458 In section 51 (use of different accounting practices within a group of companies) for subsection (5) substitute—
“(5) In this section “tax advantage” has the meaning given by section 840ZA of the Taxes Act 1988.”
459 In section 59 (construction industry scheme: contractors) after subsection (7) insert—
“(8) This section is subject to section 73A (designated international organisations: exemption from section 59).”
460 In section 65 (change in control of company registered for gross payment) for subsection (3) substitute—
“(3) In this section references to a change in the control of a company are references to such a change determined in accordance with section 995 of the Income Tax Act 2007.”
461 After section 73 (regulations under this Chapter: supplementary) insert—
(1) The Treasury may by order designate for the purposes of this section any international organisation of which the United Kingdom is a member.
(2) Section 59 does not apply to an organisation which is so designated.”
462 (1) Amend section 83 (giving through the self-assessment return) as follows.
(2) Omit subsections (1) to (3).
(3) For subsections (4) and (5) substitute—
“(4) A charitable company is treated as having made a claim for any exemption to which it may be entitled under section 505(1)(c)(ii) of the Taxes Act 1988 (charities: exemption from tax under Case III of Schedule D) if—
(a) it receives a gift as a result of a direction under section 429(2) of the Income Tax Act 2007 (giving through self-assessment return), and
(b) as a result of section 429(4) of that Act, the gift is treated as a qualifying donation for the purposes of Chapter 2 of Part 8 of that Act (gift aid).
(5) In this section “charitable company” means any body of persons established for charitable purposes only.”
463 Omit sections 101 (payment of royalties without deduction at source) and 102 (claim for tax deducted at source from exempt interest or royalty payments).
464 Omit sections 119 to 123 (individuals benefited by film relief).
465 Omit sections 126 to 130 (individuals in partnership: exit charge).
466 In section 155(6)(a) and (b) (persons by whom scheme may be established: supplementary) for “section 840A(1)(b) of ICTA” substitute “section 991(2)(b) of ITA 2007”.
467 In section 161 (meaning of “payment” etc) for subsection (8) substitute—
“(8) For the purposes of this section whether a person is connected with another person is determined in accordance with section 993 of ITA 2007.”
468 (1) Amend section 162 (meaning of “loan”) as follows.
(2) In subsection (2)(a) for “section 841 of ICTA” substitute “section 1005 of ITA 2007”.
(3) For subsection (6) substitute—
“(6) For the purposes of this section whether a person is connected with another person is determined in accordance with section 993 of ITA 2007.”
469 In section 172A (surrender) for subsection (11) substitute—
“(11) For the purposes of this section whether a person is connected with another person is determined in accordance with section 993 of ITA 2007.”
470 In section 172B (increase in rights of connected person on death) for subsection (9) substitute—
“(9) For the purposes of this section whether a person is connected with another person is determined in accordance with section 993 of ITA 2007.”
471 In section 172C (allocation of unallocated employer contributions) for subsection (7) substitute—
“(7) For the purposes of this section whether a person is connected with another person is determined in accordance with section 993 of ITA 2007.”
472 In section 172D (limit on increase in benefits) for subsection (6) substitute—
“(6) For the purposes of this section whether a person is connected with another person is determined in accordance with section 993 of ITA 2007.”
473 (1) Amend section 189 (relevant UK individual) as follows.
(2) In subsection (2)—
(a) omit the “and” immediately after paragraph (b),
(b) after paragraph (b) insert—
“(ba) income which is chargeable under Part 3 of ITTOIA 2005 and is immediately derived from the carrying on of a UK furnished holiday lettings business (whether individually or as a partner acting personally in a partnership), and”, and
(c) for paragraph (c) substitute—
“(c) income to which subsection (2A) applies.”
(3) After subsection (2) insert—
“(2A) This subsection applies to income if—
(a) it is patent income, and
(b) the individual, alone or jointly, devised the invention for which the patent in question was granted.”
(4) After subsection (4) insert—
“(5) “UK furnished holiday lettings business” means a UK property business so far as consisting of the commercial letting of furnished holiday accommodation (within the meaning of Chapter 6 of Part 3 of ITTOIA 2005).
(6) If there is a letting of accommodation only part of which is holiday accommodation, just and reasonable apportionments are to be made for the purpose of determining what is comprised in a UK furnished holiday lettings business.
(7) “Patent income” means—
(a) royalties or other sums paid in respect of the use of a patent charged to tax under section 579 of ITTOIA 2005,
(b) amounts on which tax is payable under section 587 or 593 of ITTOIA 2005, or
(c) amounts on which tax is payable under—
(i) section 472(5) of the Capital Allowances Act, or
(ii) paragraph 100 of Schedule 3 to that Act.”
474 In section 192 (relief at source) omit subsection (5).
475 In section 193(6) (relief under net pay arrangements)—
(a) for “from the total income” substitute “in calculating the net income”, and
(b) at the end insert “(see Step 2 of the calculation in section 23 of ITA 2007)”.
476 In section 194(1) (relief on making of claim)—
(a) for “from the total income” substitute “in calculating the net income”, and
(b) at the end insert “(see Step 2 of the calculation in section 23 of ITA 2007)”.
477 In section 266A (member’s liability) for subsection (7) substitute—
“(7) For the purposes of this section whether a person is connected with another person is determined in accordance with section 993 of ITA 2007.”
478 In section 273 (members liable as scheme administrator) for subsection (11) substitute—
“(11) For the purposes of this section whether a person is connected with another person is determined in accordance with section 993 of ITA 2007.”
479 In section 278 (market value) for subsection (4) substitute—
“(4) For the purposes of this section whether a person is connected with another person is determined in accordance with section 993 of ITA 2007.”
480 (1) Amend section 279 (other definitions) as follows.
(2) In subsection (1)—
(a) omit the definition of “charity”,
(b) after the definitions of “pension credit” and “pension debit” insert “and”, and
(c) omit the words after the definition of “pension sharing order or provision”.
(3) After that subsection insert—
“(1A) In this Part, so far as it forms part of the Corporation Tax Acts, expressions which are defined for the purposes of the Income Tax Acts are to be given the same meaning as they have in the Income Tax Acts.”
481 (1) Amend section 280 (abbreviations and general index) as follows.
(2) In subsection (1) omit the “and” immediately before the definition of “ITTOIA 2005” and after that definition insert “, and
“ITA 2007” means the Income Tax Act 2007.”
Income Tax Act 2007