Legalize / United Kingdom / Public General Act

Income and Corporation Taxes Act 1988

Type Public General Act

Publication 1988-02-09

State In force

Department Statute Law Database

Source legislation.gov.uk

Reform history JSON API

PART I — THE CHARGE TO TAX

Income tax

Relief for necessary expenses.

1

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Business entertaining expenses.

2

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Payments to unmarried minor children of settlor.

3

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Reduction of United Kingdom taxes by amount of credit due.

4

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5

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Corporation tax

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6

(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Employment

7

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Onshore pooling.

8

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9

(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(2A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(2B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(2C) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(5) Where . . . any enactment applies both to income tax and to corporation tax—

(a) it shall not be affected in its operation by the fact that they are distinct taxes but, so far as is consistent with the Corporation Tax Acts, shall apply in relation to income tax and corporation tax as if they were one tax, so that, in particular, a matter which in a case involving two individuals is relevant for both of them in relation to income tax shall in a like case involving an individual and a company be relevant for him in relation to that tax and for it in relation to corporation tax; and

(b) for that purpose references in any such enactment to a relief from or charge to income tax, or to a specified provision of the Income Tax Acts shall, in the absence of or subject to any express adaptation, be construed as being or including a reference to any corresponding relief from or charge to corporation tax, or to any corresponding provision of the Corporation Tax Acts.

(6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Supplement in respect of a pre-commencement accounting period

10

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Reduction in chargeable profits: failure to qualify for exemptions

11

(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(2A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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12

(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(5A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(5B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(7ZA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(7A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(7B) . . .

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(7C) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(8) Where it appears to the inspector that the beginning or end of any accounting period of a company is uncertain, he may make an assessment on the company for such period, not exceeding 12 months, as appears to him appropriate, and that period shall be treated for all purposes as an accounting period of the company unless either—

(a) the inspector on further facts coming to his knowledge sees fit to revise it; or

(b) on an appeal against the assessment in respect of some other matter the company shows the true accounting periods;

and if on an appeal against an assessment made by virtue of this subsection the company shows the true accounting periods, the assessment appealed against shall, as regards the period to which it relates, have effect as an assessment or assessments for the true accounting periods, and there may be made such other assessments for any such periods or any of them as might have been made at the time when the assessment appealed against was made.

(9) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Small companies’ rate

Qualifying vehicles

13

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Advance corporation tax

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14

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The six Schedules

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15

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Schedule B

16

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Schedule C

17

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Schedule D

18

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Schedule E

19

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Schedule F

20

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PART II — PROVISIONS RELATING TO THE SCHEDULE A CHARGE

General

Persons chargeable

21

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Assessments

22

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Collection from lessees and agents

23

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Construction of Part II

24

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Deductions and other allowances

Deductions from rent: general rules

25

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Deductions from rent: land managed as one estate

26

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Deductions from rent: maintenance funds for historic buildings

27

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Deductions from receipts other than rent

28

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Sporting rights

29

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Expenditure on making sea walls

30

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Provisions supplementary to sections 25 to 30

31

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Capital allowances for machinery and plant used in estate management

32

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Agricultural land: allowance for excess expenditure on maintenance

33

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Premiums, leases at undervalue etc

Treatment of premiums etc. as rent or Schedule D profits

34

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Schedule D charge on assignment of lease granted at an undervalue

35

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Schedule D charge on sale of land with right to reconveyance

36

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Premiums paid etc: deductions from premiums and rent received

37

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Rules for ascertaining duration of leases

38

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Saving for pre-1963 leases, and special relief for individuals

39

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Supplementary provisions

Tax treatment of receipts and outgoings on sale of land

40

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Relief for rent etc. not paid

41

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Appeals against determinations under sections 34 to 36

42

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Non-residents

43

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PART III — GOVERNMENT SECURITIES

General

Income tax: mode of charge

44

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Interpretation of Part III

45

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Government securities: exemptions from tax

Savings certificates and tax reserve certificates

46

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United Kingdom government securities held by non-residents

47

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Securities of foreign states

48

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Stock and dividends in name of Treasury etc

49

(1) No tax shall be chargeable in respect of the stock or dividends—

(a) transferred, in pursuance of any Act of Parliament, to accounts in the books of the Bank of England in the name of the Treasury or the National Debt Commissioners, or

(b) transferred, in pursuance of any Act of Parliament, to the Treasury or the National Debt Commissioners and in respect of which the Treasury or those Commissioners are entered as holder in the registers kept by the Registrar of Government Stock,

but the Bank of England and the Registrar of Government Stock shall each transmit to the Board an account of the total amount thereof in those books or registers as the case may be.

(2) No tax shall be chargeable in respect of the stock or dividends belonging to the Crown, in whatever name they may stand in the books of the Bank of England or in the registers kept by the Registrar of Government Stock.

(3) In this section “dividends” means any interest, public annuities, dividends or shares of annuities.

(4) In this section “Registrar of Government Stock” means the person or persons appointed in accordance with regulations under section 47(1)(b) of the Finance Act 1942 (see regulation 3 of the Government Stock Regulations 2004).

Government securities: interest payable without deduction of tax

United Kingdom securities: Treasury directions for payment without deduction of tax

50

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Treasury directions as respects Northern Ireland securities

51

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Taxation of interest on converted government securities and interest which becomes subject to deduction

52

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PART IV — PROVISIONS RELATING TO THE SCHEDULE D CHARGE

CHAPTER I — SUPPLEMENTARY CHARGING PROVISIONS

Farming and other commercial occupation of land (except woodlands)

53

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Woodlands managed on a commercial basis

54

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Mines, quarries and other concerns

55

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Transactions in deposits with and without certificates or in debts

56

(1) Subsection (2) below applies to the following rights—

(a) the right to receive the amount, with or without interest, stated in a certificate of deposit;

(b) the right to receive an amount payable with interest—

(i) in a transaction in which no certificate of deposit or security is issued, and

(ii) which is payable by a bank or similar institution or a person regularly engaging in similar transactions;

and the right to receive that interest.

(2) Profits or gains arising to a company from the disposal of a right to which this subsection applies or, except so far as it is a right to receive interest, from the exercise of any such right (whether by the person to whom the certificate was issued or by some other person, or, as the case may be, by the person who acquired the right in the transaction referred to in subsection (1) above or by some person acquiring it directly or indirectly from that person), shall, if not falling to be taken into account as a trading receipt, be treated as an amount to which the charge to corporation tax on income applies.

(3) Subsection (2) above and section 551 of ITTOIA 2005 (charge to income tax on profits from disposal of deposit rights) do not apply in the case of the disposal or exercise of a right to receive an amount stated in a certificate of deposit or interest on such an amount—

(a) if the company disposing of the right acquired it before 7th March 1973;

(b) to any profits or gains arising to a fund or scheme in the case of which provision is made by section 613(4) or 614(2) or (3) or section 186 of the Finance Act 2004 for exempting the whole or part of its income from income tax;

(3A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3C) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3D) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4A) This section and section 56A shall not apply for the purposes of corporation tax except in relation to rights in existence before 1st April 1996.

(4B) For the purposes of corporation tax, where any profits or gains arising from the disposal or exercise of a right in existence before 1st April 1996 are, or (if there were any) would be, chargeable under this section, nothing in Part 5 of CTA 2009 (loan relationships) shall require any amount relating to that disposal, or to the exercise of that right, to be brought into account for the purposes of that Part.

(5) In this section—

“certificate of deposit” means a document relating to money, in any currency, which has been deposited with the issuer or some other person, being a document which recognises an obligation to pay a stated amount to bearer or to order, with or without interest, and being a document by the delivery of which, with or without endorsement, the right to receive that stated amount, with or without interest, is transferable; and

“security” has the same meaning as in section 132 of the 1992 Act.

Deep discount securities

57

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Foreign pensions

58

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Persons chargeable

59

(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

CHAPTER II — INCOME TAX: BASIS OF ASSESSMENT ETC.

Cases I and II

Assessment on preceding year basis

60

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Special basis at commencement of trade, profession or vocation

61

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Special basis for early years following commencement

62

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Special basis on discontinuance

63

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Cases III, IV and V

Case III assessments: general

64

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Cases IV and V assessments: general

65

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Special rules for fresh income

66

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Special rules where source of income disposed of or yield ceases

67

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Special rules where property etc. situated in Republic of Ireland

68

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Case VI

Assessment on current year basis unless otherwise directed

69

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CHAPTER III — CORPORATION TAX: BASIS OF ASSESSMENT ETC

Basis of assessment etc

70

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