Legalize / United Kingdom / Public General Act

Income and Corporation Taxes Act 1988

Type Public General Act

Publication 1988-02-09

Last updated 2022-07-14

State In force

Department Statute Law Database

Source legislation.gov.uk

articles Not indexed

Reform history JSON API

[^c23834421]: Sch. 28AA para. 14(1): definition of "insurance company" repealed (with effect in accordance with Sch. 10 para. 17(2) of the repealing Act) by Finance Act 2007 (c. 11), Sch. 10 para. 14(2)(f), Sch. 27 Pt. 2(10), Note

[^c23834711]: Sch. 28AA para. 14(1): words in definition of "losses" substituted (1.4.2009 with effect in accordance with s. 1329(1) of the amending Act) by Corporation Tax Act 2009 (c. 4), Sch. 1 para. 291(8)(a) (with Sch. 2 Pts. 1, 2)

[^c23834731]: Sch. 28AA para. 14(1): in definition of "losses", para. (d) substituted (1.4.2009 with effect in accordance with s. 1329(1) of the amending Act) by Corporation Tax Act 2009 (c. 4), Sch. 1 para. 291(8)(b) (with Sch. 2 Pts. 1, 2)

[^c23834461]: Sch. 28AA para. 5A(4) substituted (6.4.2008 with effect in accordance with art. 1(2) of the amending S.I.) by The Companies Act 2006 (Consequential Amendments) (Taxes and National Insurance) Order 2008 (S.I. 2008/954), arts. 1(1), 15 (with art. 4)

[^c23834381]: Sch. 28AA paras. 5B, 5C excluded (19.7.2006) by Finance Act 2006 (c. 25), s. 113(6), Sch. 17 para. 12(2)(3)

[^c23834481]: Sch. 28AA paras. 5B, 5C excluded by The Authorised Investment Funds (Tax) Regulations 2006 (S.I. 2006/964), reg. 69X(6) (as inserted (6.4.2008) by The Authorised Investment Funds (Tax) (Amendment) Regulations 2008 (S.I. 2008/705), regs. 1, 5)

[^c23834391]: Sch. 28AA paras. 5B, 5C excluded (19.7.2006) by Finance Act 2006 (c. 25), s. 113(6), Sch. 17 para. 12(2)(3)

[^c23834491]: Sch. 28AA paras. 5B, 5C excluded by The Authorised Investment Funds (Tax) Regulations 2006 (S.I. 2006/964), reg. 69X(6) (as inserted (6.4.2008) by The Authorised Investment Funds (Tax) (Amendment) Regulations 2008 (S.I. 2008/705), regs. 1, 5)

[^c23834641]: Words in Sch. 28AA para. 6A(3) substituted (1.4.2009 with effect in accordance with s. 1329(1) of the amending Act) by Corporation Tax Act 2009 (c. 4), Sch. 1 para. 291(4) (with Sch. 2 Pts. 1, 2)

[^c23833951]: Words in Sch. 28AA para. 6E inserted (6.4.2005 with effect in accordance with s. 883(1) of the amending Act) by Income Tax (Trading and Other Income) Act 2005 (c. 5), Sch. 1 para. 351(3) (with Sch. 2)

[^c23834441]: Words in Sch. 28AA para. 6E inserted (3.1.2008 with effect in accordance with art. 1(2) of the amending S.I.) by The Income Tax Act 2007 (Amendment) (No. 3) Order 2007 (S.I. 2007/3506), arts. 1(1), 2(4)

[^c23834751]: Words in Sch. 28AA para. 6E repealed (1.4.2009 with effect in accordance with s. 1329(1) of the repealing Act) by Corporation Tax Act 2009 (c. 4), Sch. 1 para. 291(5)(a), Sch. 3 Pt. 1 (with Sch. 2 Pts. 1, 2)

[^c23834661]: Words in Sch. 28AA para. 6E inserted (1.4.2009 with effect in accordance with s. 1329(1) of the amending Act) by Corporation Tax Act 2009 (c. 4), Sch. 1 para. 291(5)(b) (with Sch. 2 Pts. 1, 2)

[^c23834691]: Word in Sch. 28AA para. 6E cross-heading substituted (1.4.2009 with effect in accordance with s. 1329(1) of the amending Act) by Corporation Tax Act 2009 (c. 4), Sch. 1 para. 291(6) (with Sch. 2 Pts. 1, 2)

[^c23834281]: Words in Sch. 28AA para. 7A(2)(b) repealed (with effect in accordance with s. 38 of the repealing Act) by Finance (No. 2) Act 2005 (c. 22), Sch. 11 Pt. 2(7), Note

[^c23834301]: Words in Sch. 28AA para. 7C(2)(b) repealed (with effect in accordance with s. 38 of the repealing Act) by Finance (No. 2) Act 2005 (c. 22), Sch. 11 Pt. 2(7), Note

[^c22780291]: Sch. 13B para. 3(2A) inserted (with effect in accordance with s. 53(6) of the amending Act) by Finance Act 2001 (c. 9), Sch. 11 para. 2

[^c22780261]: Words in Sch. 13B para. 4(1)(b) inserted (with effect in accordance with s. 39(10) of the amending Act) by Finance Act 2000 (c. 17), s. 39(9)

[^c22780281]: 1990 c. 29.

[^c22780311]: Sch. 13B para. 5(4)(ca) inserted (with effect in accordance with s. 53(6) of the amending Act) by Finance Act 2001 (c. 9), Sch. 11 para. 3

[^c22780331]: Sch. 13B para. 6(4A) inserted (with effect in accordance with s. 53(6) of the amending Act) by Finance Act 2001 (c. 9), Sch. 11 para. 4(2)

[^c22780351]: Sch. 13B para. 6(7A) inserted (with effect in accordance with s. 53(6) of the amending Act) by Finance Act 2001 (c. 9), Sch. 11 para. 4(3)

[^c22780371]: Sch. 13B para. 7(3) inserted (with effect in accordance with s. 53(6) of the amending Act) by Finance Act 2001 (c. 9), Sch. 11 para. 5

[^c22780391]: Words in Sch. 13B para. 8(4) inserted (with effect in accordance with s. 53(6) of the amending Act) by Finance Act 2001 (c. 9), Sch. 11 para. 6(2)

[^c22780411]: Sch. 13B para. 8(5A) inserted (with effect in accordance with s. 53(6) of the amending Act) by Finance Act 2001 (c. 9), Sch. 11 para. 6(3)

[^c22747291]: 1993 c. 48.

[^c22747301]: 1993 c. 49.

[^c22747311]: 1993 c. 48.

[^c22747321]: 1993 c. 49.

[^c23389441]: Words in Sch. 4AA para. 1(4) substituted (28.9.2004 with effect in accordance with art. 1(2) of the amending S.I.) by The Finance Act 2004, Sections 38 to 40 and 45 and Schedule 6 (Consequential Amendment of Enactments) Order 2004 (S.I. 2004/2310), Sch. para. 35(2)

[^c23389461]: Words in Sch. 4AA para. 7(3) substituted (28.9.2004 with effect in accordance with art. 1(2) of the amending S.I.) by The Finance Act 2004, Sections 38 to 40 and 45 and Schedule 6 (Consequential Amendment of Enactments) Order 2004 (S.I. 2004/2310), Sch. para. 35(3)

[^c23389481]: Sch. 4AA para. 13(1)(2) substituted (28.9.2004 with effect in accordance with art. 1(2) of the amending S.I.) by The Finance Act 2004, Sections 38 to 40 and 45 and Schedule 6 (Consequential Amendment of Enactments) Order 2004 (S.I. 2004/2310), Sch. para. 35(4)

[^c23389501]: Sch. 4AA para. 13 heading substituted (28.9.2004 with effect in accordance with art. 1(2) of the amending S.I.) by virtue of The Finance Act 2004, Sections 38 to 40 and 45 and Schedule 6 (Consequential Amendment of Enactments) Order 2004 (S.I. 2004/2310), Sch. para. 35(5)

[^c23834921]: Words in Sch. 28AB para. 3(2)(a) inserted (with effect in accordance with Sch. 11 para. 3 of the amending Act) by Finance Act 2010 (c. 13), Sch. 11 para. 1(2)(a)

[^c23834941]: Words in Sch. 28AB para. 3(2)(b) substituted (with effect in accordance with Sch. 11 para. 3 of the amending Act) by Finance Act 2010 (c. 13), Sch. 11 para. 1(2)(b)

[^c23834961]: Words in Sch. 28AB para. 3(3)(b) substituted (with effect in accordance with Sch. 11 para. 3 of the amending Act) by Finance Act 2010 (c. 13), Sch. 11 para. 1(3)

[^c23822131]: Sch. 18A Pt. 2 modified (28.10.2008 with effect in accordance with reg. 1(2) of the modifying S.I.) by The Group Relief for Overseas Losses (Modification of the Corporation Tax Acts for Non-resident Insurance Companies) Regulations 2008 (S.I. 2008/2646), regs. 1(1), 2

[^c23822141]: Words in Sch. 18A para. 13(3) substituted (1.4.2009 with effect in accordance with s. 1329(1) of the amending Act) by Corporation Tax Act 2009 (c. 4), Sch. 1 para. 281 (with Sch. 2 Pts. 1, 2)

[^c23823761]: Words in Sch. 19C para. 1(6)(b) inserted (with effect in accordance with s. 111(3) of the amending Act) by Finance Act 2008 (c. 9), Sch. 35 para. 9(2)

[^c23823841]: Words in Sch. 19C para. 6(6)(a) substituted (1.4.2009 with effect in accordance with s. 1329(1) of the amending Act) by Corporation Tax Act 2009 (c. 4), Sch. 1 para. 284(2)(a) (with Sch. 2 Pts. 1, 2)

[^c23823861]: Words in Sch. 19C para. 6(6)(b) substituted (1.4.2009 with effect in accordance with s. 1329(1) of the amending Act) by Corporation Tax Act 2009 (c. 4), Sch. 1 para. 284(2)(b) (with Sch. 2 Pts. 1, 2)

[^c23823881]: Words in Sch. 19C para. 6(9) substituted (1.4.2009 with effect in accordance with s. 1329(1) of the amending Act) by Corporation Tax Act 2009 (c. 4), Sch. 1 para. 284(3) (with Sch. 2 Pts. 1, 2)

[^c23823801]: Words in Sch. 19C para. 17(2) substituted (with effect in accordance with s. 111(3) of the amending Act) by Finance Act 2008 (c. 9), Sch. 35 para. 9(3)(a)

[^c23823821]: Words in Sch. 19C para. 17(3) substituted (with effect in accordance with s. 111(3) of the amending Act) by Finance Act 2008 (c. 9), Sch. 35 para. 9(3)(b)

[^c23823781]: Sch. 19C para. 17(3A) inserted (with effect in accordance with s. 111(3) of the amending Act) by Finance Act 2008 (c. 9), Sch. 35 para. 9(3)(c)

[^c23387701]: O.J. L374, 31.12.1991, p.7.

[^c23822591]: Sch. 19ABA para. 8 substituted (12.8.2008 with effect in accordance with art. 1(2)-(4) of the amending S.I.) by The Insurance Companies (Taxation of Insurance Special Purpose Vehicles) Order 2008 (S.I. 2008/1923), arts. 1(1), 3(2)

[^c23822851]: Sch. 19ABA paras. 9-11 and cross-headings repealed (1.4.2010 with effect in accordance with s. 381(1) of the repealing Act) by Taxation (International and Other Provisions) Act 2010 (c. 8), Sch. 8 para. 34(2), Sch. 10 Pt. 1 (with Sch. 9)

[^c23822831]: Sch. 19ABA paras. 9-11 and cross-headings repealed (1.4.2010 with effect in accordance with s. 381(1) of the repealing Act) by Taxation (International and Other Provisions) Act 2010 (c. 8), Sch. 8 para. 34(2), Sch. 10 Pt. 1 (with Sch. 9)

[^c23822871]: Sch. 19ABA paras. 9-11 and cross-headings repealed (1.4.2010 with effect in accordance with s. 381(1) of the repealing Act) by Taxation (International and Other Provisions) Act 2010 (c. 8), Sch. 8 para. 34(2), Sch. 10 Pt. 1 (with Sch. 9)

[^c23822861]: Sch. 19ABA paras. 9-11 and cross-headings repealed (1.4.2010 with effect in accordance with s. 381(1) of the repealing Act) by Taxation (International and Other Provisions) Act 2010 (c. 8), Sch. 8 para. 34(2), Sch. 10 Pt. 1 (with Sch. 9)

[^c23822891]: Sch. 19ABA paras. 9-11 and cross-headings repealed (1.4.2010 with effect in accordance with s. 381(1) of the repealing Act) by Taxation (International and Other Provisions) Act 2010 (c. 8), Sch. 8 para. 34(2), Sch. 10 Pt. 1 (with Sch. 9)

[^c23822881]: Sch. 19ABA paras. 9-11 and cross-headings repealed (1.4.2010 with effect in accordance with s. 381(1) of the repealing Act) by Taxation (International and Other Provisions) Act 2010 (c. 8), Sch. 8 para. 34(2), Sch. 10 Pt. 1 (with Sch. 9)

[^c23380011]: 1989 c. 26.

[^c23380081]: O.J. L374, 31.12.1991, p.7.

[^c23822731]: Words in Sch. 19ABA para. 23 substituted (1.4.2009 with effect in accordance with s. 1329(1) of the amending Act) by Corporation Tax Act 2009 (c. 4), Sch. 1 para. 282(4) (with Sch. 2 Pts. 1, 2)

[^c23822761]: Words in Sch. 19ABA para. 23 cross-heading substituted (1.4.2009 with effect in accordance with s. 1329(1) of the amending Act) by Corporation Tax Act 2009 (c. 4), Sch. 1 para. 282(5) (with Sch. 2 Pts. 1, 2)

[^key-2666dd61dc08aeb31d6c6696a229d2f1]: S. 824 excluded (5.10.2020) by The Finance Act 2009, Sections 101 and 102 (Disguised Remuneration Repayment Scheme) (Appointed Day and Consequential Amendment) Order 2020 (S.I. 2020/979), arts. 1, 4

[^key-c1e1f53cbf0aed4c1f4d075304bc747c]: Corporation Tax Acts modified (14.7.2022) by Energy (Oil and Gas) Profits Levy Act 2022 (c. 40), s. 11(1)-(4) (with ss. 15(1), 16(1))

Application of sections 251B and 251C

Securities.

Application of this Chapter etc. to policies and contracts in which persons other than companies are interested

Regulations in relation to qualifying policies

Cessation of approval: general provisions.

Exemption from tax in respect of qualifying premiums.

Effect of appointment or arrangements under section 659B.

Election as to tax exempt business.

Revocable settlements allowing reversion of property.

Settlements made before 7th April 1965 but after 9th April 1946.

Special rule for computing chargeable profits.

Deductions: asset transferred within group.

Contemplative religious communities: gains exempt from corporation tax

Reduced loss relief for additions to non-profit funds

Regulations in relation to qualifying policies

Reduction of United Kingdom taxes by amount of credit due.

Recovery of tax credits incorrectly paid.

VAT penalties etc.

Interest on payments in respect of corporation tax and meaning of “the material date".

VAT penalties etc.

Territorial sea . . . .

Interpretation of the Corporation Tax Acts etc.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Qualifying trade, profession or vocation

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Assessment, recovery and postponement of supplementary charge

Introduction

Certified unit trusts: distributions.

Power to inspect documents.

Relief for individuals.

Introduction

Company vehicles

Introduction

Tax year

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Revocable settlements allowing release of obligation.

Charge on profits.

The property managing subsidiaries requirement

Payments to unmarried minor children of settlor.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Introduction

Returns where it is not established whether acceptable distribution policy applies.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Change in ownership of company with investment business: deductions generally

Change in ownership of company carrying on property business.

Provision not at arm’s length.

Sections 774B and 774D: power to provide further exceptions

Sale by individual of income derived from his personal activities.

Assets leased to traders and others.

The approved amount: mileage allowance payments

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Employment

Section 785B: expectation that relevant capital payment will not be paid

Restriction of relief for payments of interest.

Limits on credit: minimisation of the foreign tax.

Reduction of United Kingdom taxes by amount of credit due.

Recovery of tax credits incorrectly paid.

Arrangements to avoid section 812.

Disposals and acquisitions of company loan relationships with or without interest.

Insurance companies: allocation of expenses etc in computations under Case I of Schedule D.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Amount of post-commencement supplement for a post-commencement period

The approved amount: mileage allowance payments

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

The approved amount: passenger payments

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Provision not at arm’s length.

Power to inspect documents.

The approved amount: mileage allowance payments

Employment

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Sections 774B and 774D: exceptions

Leased assets subject to hire-purchase agreements.

Limits on credit: income tax.

Foreign tax on items giving rise to a non-trading credit: intangible fixed assets

Introduction to section 807C

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

The non-qualifying pool

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Change in company ownership: postponed corporation tax.

Approval of schemes.

Payments to unmarried minor children of settlor.

Dividends paid to investment trusts.

Exception for sale and repurchase of securities.

Treatment of umbrella funds

Application of this Chapter etc. to policies and contracts in which persons other than companies are interested

Returns.

Cessation of approval: general provisions.

Interest on tax overpaid.

Application of Income Tax Acts to public departments and avoidance of exempting provisions.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[SCHEDULE 19A

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Effect of appointment or arrangements under section 659B.

Allowances for expenditure on purchase of patent rights: post-31st March 1986 expenditure.

Overseas life assurance business: life policies.

Arrangements made under old law.

Interpretation of Income Tax Acts.

Interest on payments in respect of corporation tax and meaning of “the material date".

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Employment

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Imputation of chargeable profits and creditable tax of controlled foreign companies

Special rule for computing chargeable profits.

Tax credits under Part 1 of Tax Credits Act 2002

Rent factoring of leases of plant or machinery

Provision not at arm’s length.

Tariff receipts and tax-exempt tariffing receipts

The Arbitration Convention.

Withdrawal of right to tax credit of certain non-resident companies connected with unitary states.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Interpretation of Income Tax Acts.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Supplement in respect of a pre-commencement accounting period

The mixed pool of qualifying E&A expenditure and supplement previously allowed

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Qualifying vehicles

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Deemed interest: cash collateral under stock lending arrangements

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Change in ownership of company carrying on property business.

Foreign tax on items giving rise to a non-trading credit: intangible fixed assets

Dividends paid out of transferred profits.

Introduction to section 807E

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Supplement in respect of a post-commencement period

Amount of post-commencement supplement for a post-commencement period

Treatment of price differential on sale and repurchase of securities.

Sales etc. at an undervalue or overvalue.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Insurance companies carrying on more than one category of business: restriction of credit.

Provisions supplementary to section 520.

Reduced loss relief for additions to non-profit funds

Effect of appointment or arrangements under section 659B.

Territorial sea . . . .

Commencement.

Settlements made after 6th April 1965.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

The approved amount: passenger payments

Change in ownership of company with investment business: deductions generally

Interpretation of credit code.

Insurance companies carrying on more than one category of business: restriction of credit.

Disposals and acquisitions of company loan relationships with or without interest.

Introduction to section 807E

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Supplement in respect of a pre-commencement accounting period

Introduction

Assets leased to traders and others.

Qualifying vehicles

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

About this Schedule

Conditions for tax exempt business.

Close companies.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Sales etc. at an undervalue or overvalue.

Schemes and arrangements designed to increase relief

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Application of Income Tax Acts to public departments and avoidance of exempting provisions.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

About this Schedule

Qualifying companies

Accounting periods

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Dividends paid out of transferred profits.

Supplement in respect of a post-commencement period

The pool of qualifying E&A losses and the pool of non-qualifying losses

Disposals and acquisitions of company loan relationships with or without interest.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Accounting periods

The mixed pool of qualifying E&A expenditure and supplement previously allowed

Amount of post-commencement supplement for a post-commencement period

The non-qualifying pool

Supplement in respect of a pre-commencement accounting period

Onshore pooling.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Qualifying companies

Supplement in respect of a pre-commencement accounting period

Relief for rent etc. not paid.

Employees seconded to charities and educational establishments.

Paying agents.

Exemptions from section 148.

Relief for necessary expenses.

U.K. company distributions not generally chargeable to corporation tax.

Procedure for making election.

Early conversion or surrender of life policies.

Form of relief.

Second loans.

Maximum benefits payable to members.

Interpretation of Income Tax Acts.

Introduction to section 807C

Withdrawal of right to tax credit of certain non-resident companies connected with unitary states.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Venture capital trusts.

The mixed pool of qualifying E&A expenditure and supplement previously allowed

The non-qualifying pool

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Restriction on deduction of interest or dividends from trading income.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Interpretation of the Tax Acts.

Interpretation of Income Tax Acts.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Accounting periods

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Power to inspect documents.

Arrangements to avoid section 812.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Interpretation of Income Tax Acts.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Meaning of “UK property business” and “overseas property business”

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Adjustment of profits on averaging claim

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Qualifying companies

Repayment supplements: companies.

Recovery of tax credits incorrectly paid.

Interest on tax overpaid.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Interpretation of Income Tax Acts.

Interpretation of the Tax Acts.

Interpretation of Income Tax Acts.

Interpretation of the Corporation Tax Acts.

Interest on payments in respect of corporation tax and meaning of “the material date".

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

The mixed pool of qualifying E&A expenditure and supplement previously allowed

Interest on payments in respect of corporation tax and meaning of “the material date".

Interest on tax overpaid.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Interpretation of this Act.

Meaning of “research and development”.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Cash equivalent

Reduction for business travel

Reduction for age of car

Automatic cars made available to disabled drivers

5A

(1) Sub-paragraph (2) below applies where—

(a) paragraph 3 above (car with CO₂ emissions figure) applies to the car,

(b) the car has automatic transmission,

(d) by reason of his disability he must, if he wants to drive a car, drive a car that has automatic transmission.

For this purpose the car is not at any time available to the employee by reason only of its being made available to a member of his family or household.

(2) If the applicable CO₂ figure for the car (“the relevant car”) is more than it would have been if the car had been an equivalent manual car, paragraph 3 above shall have effect as if the applicable CO₂ emissions figure in relation to the relevant car were the same as that in relation to an equivalent manual car.

(3) For this purpose “an equivalent manual car” means a car that—

(a) is first registered at or about the same time as the relevant car, and

(b) does not have automatic transmission, but otherwise is the closest variant available of the make and model of the relevant car.

(4) For the purposes of this paragraph a car has automatic transmission if—

(a) the driver of the car is not provided with any means whereby he may vary the gear ratio between the engine and the road wheels independently of the accelerator and the brakes, or

(b) he is provided with such means, but they do not include a clutch pedal or lever that he may operate manually.

(5) In this paragraph—

“the applicable CO₂ emissions figure” has the same meaning as in paragraph 3 above; and

“disabled person’s badge” has the meaning given in section 168AA(3).

“EC certificate of conformity", “EC type-approval certificate" and “UK approval certificate"

5B

In this Schedule—

“EC certificate of conformity” means a certificate of conformity issued by a manufacturer under any provision of the law of a Member State implementing Article 6 of Council Directive 70/156/EEC, as amended;

“EC type-approval certificate” means a type-approval certificate issued under any provision of the law of a Member State implementing Council Directive 70/156/EEC, as amended; and

“UK approval certificate” means a certificate issued under—section 58(1) or (4) of the Road Traffic Act 1988, orArticle 31A(4) or (5) of the Road Traffic (Northern Ireland) Order 1981.

Car with no CO2 emissions figure

5C

(1) This paragraph applies where—

(a) the car is first registered on or after 1st January 1998, and

(b) paragraph 3 above does not apply.

(2) If the car has an internal combustion engine with one or more reciprocating pistons, the appropriate percentage for the year is ascertained from the following Table—

Cylinder capacity of car in cubic centimetres	Appropriate percentage
1,400 or less	15%
More than 1,400 but not more than 2,000	25%
More than 2,000	35%

For this purpose a car’s cylinder capacity is the capacity of its engine calculated as for the purposes of the Vehicle Excise and Registration Act 1994.

(3) If sub-paragraph (2) above does not apply the appropriate percentage for the year is—

(a) 15%, if the car is an electrically propelled vehicle, and

(b) 35%, in any other case.

(4) This paragraph is subject to paragraph 5D (diesel car supplement) and any regulations under paragraph 5E (power to provide for discounts) below.

Diesel car supplement

5D

(1) This paragraph applies where the car—

(a) is propelled solely by diesel, and

(b) is first registered on or after 1st January 1998.

(2) The appropriate percentage for the year is whichever is the smaller of—

(a) the percentage which is 3% greater than the appropriate percentage for the year ascertained in accordance with paragraphs 2 to 5C above, and

(b) 35%.

(3) In sub-paragraph (1) “diesel” means any diesel fuel within the definition in Article 2 of Directive 98/70/EC of the European Parliament and of the Council.

(4) This paragraph is subject to any regulations under paragraph 5E below (power to provide for discounts).

Discounts

5E

The Treasury may by regulations provide for the value of the appropriate percentage as determined in accordance with paragraphs 2 to 5D above to be reduced by such amount as may be prescribed in the regulations, in such circumstances and subject to such conditions as may be so prescribed.

Car registered before 1st January 1998

5F

(1) This paragraph applies where the car was first registered before 1st January 1998.

(2) Where the car has an internal combustion engine with one or more reciprocating pistons, the appropriate percentage for the year is ascertained from the following Table—

Cylinder capacity of car in cubic centimetres	Appropriate percentage
1,400 or less	15%
More than 1,400 but not more than 2,000	22%
More than 2,000	32%

For this purpose a car’s cylinder capacity is the capacity of its engine calculated as for the purposes of the Vehicle Excise and Registration Act 1994.

(3) Where sub-paragraph (2) above does not apply, the appropriate percentage for the year is—

(a) 15%, if the car is an electrically propelled vehicle, and

(b) 32%, in any other case.

Electrically propelled vehicle

5G

For the purposes of this Schedule, a vehicle is not an electrically propelled vehicle unless—

(a) it is propelled solely by electrical power, and

(b) that power is derived from—

(i) a source external to the vehicle, or

(ii) an electrical storage battery which is not connected to any source of power when the vehicle is in motion.

Reduction for periods when car unavailable

6

Subject to paragraph 7 below, where for any part of the year concerned the car is unavailable, the cash equivalent of the benefit is the amount ascertained under the preceding provisions of this Schedule multiplied by the fraction—

Reduction for payments for use of car

7

(1) Where in the year concerned the employee is required, as a condition of the car being available for his private use, to pay any amount of money (whether by way of deduction from his emoluments or otherwise) for that use, then—

(a) if the amount ascertained under the preceding provisions of this Schedule exceeds the relevant sum, the cash equivalent of the benefit is an amount equal to the excess;

(b) if the relevant sum exceeds or is equal to the amount ascertained under the preceding provisions of this Schedule, the cash equivalent of the benefit is nil.

(2) In sub-paragraph (1) above—

(a) “the relevant sum” means the amount paid by the employee, as there mentioned, in respect of the year concerned;

(b) the reference to the car being available for the employee’s private use includes a reference to the car being available for the private use of others being members of his family or household.

Replacement cars

8

The Treasury may by regulations provide that where—

(a) a car is normally available to the employee but for a period of less than 30 days it is not available to him,

(b) another car is made available to the employee in order to replace the car mentioned in paragraph (a) above for the whole or part of the period, and

this Schedule shall have effect in relation to the cars concerned subject to such modifications as are prescribed by the regulations.

Meaning of “unavailable”

9

For the purposes of this Schedule a car is to be treated as being unavailable on any day if—

(a) the day falls before the first day on which the car is available to the employee,

(b) the day falls after the last day on which the car is available to the employee, or

General

10

For the purposes of this Schedule a car is available to an employee at a particular time if it is then made available, by reason of his employment and without any transfer of the property in it, either to him or to others being members of his family or household.

Accounting periods

Repayment supplements: companies.

Territorial sea and designated areas.

Farming and market gardening: relief for fluctuating profits.

Substitution of security: supplemental.

Losses from overseas property business.

Savings, transitional provisions, consequential amendments and repeals.

469

(1) This section applies to—

(a) any unit trust scheme that is neither an authorised unit trust nor an umbrella scheme ; and

(b) any authorised unit trust to which, by virtue of subsection (5) of section 468, that section does not apply,

except where the trustees of the scheme are not resident in the United Kingdom.

(2) Income arising to the trustees of the scheme shall be regarded for the purposes of the Tax Acts as income of the trustees (and not as income of the unit holders); and the trustees (and not the unit holders) shall be regarded as the persons to or on whom allowances or charges are to be made under the provisions of those Acts relating to relief for capital expenditure.

(3) For the purposes of the Tax Acts the unit holders shall be treated as receiving annual payments (made by the trustees under deduction of tax) in proportion to their rights.

(4) The total amount of those annual payments in respect of any distribution period shall be the amount which, after deducting income tax at the basic rate in force for the year of assessment in which the payments are treated as made, is equal to the aggregate amount shown in the accounts of the scheme as income available for payment to unit holders or for investment.

(5) The date on which the annual payments are treated as made shall be the date or latest date provided by the terms of the scheme for any distribution in respect of the distribution period in question, except that, if—

(a) the date so provided is more than 12 months after the end of the period; or

(b) no date is so provided,

the date on which the payments are treated as made shall be the last day of the period.

(5A) Subsection (5B) below applies where for any year of assessment—

(a) the trustees are (or, apart from this subsection, would be) chargeable under section 350 with tax on payments treated as made by them under subsection (3) above, and

(b) there is an uncredited surplus in the case of the scheme.

(5B) Where this subsection applies, the amount on which the trustees would otherwise be so chargeable shall be reduced—

(a) if the surplus is greater than that amount, to nil, or

(b) if it is not, by an amount equal to the surplus.

(5C) For the purposes of subsections (5A) and (5B) above whether there is an uncredited surplus for a year of assessment in the case of a scheme (and, if so, its amount) shall be ascertained by—

(a) determining, for each earlier year of assessment in which the income on which the trustees were chargeable to tax by virtue of subsection (2) above exceeded the amount treated by subsection (3) above as annual payments received by the unit holders, the amount of the excess,

(b) aggregating the amounts determined in the case of the scheme under paragraph (a) above, and

(c) deducting from that aggregate the total of any reductions made in the case of the scheme under subsection (5B) above for earlier years of assessment.

(5D) The references in subsection (5C)(a) above to subsections (2) and (3) above include references to subsections (2) and (3) of section 354A of the 1970 Act.

(6) In this section “distribution period”means a period beginning on or after 1st April 1987 over which income from the investments subject to the trusts is aggregated for the purposes of ascertaining the amount available for distribution to unit holders, but—

(a) if the scheme does not make provision for distribution periods, then for the purposes of this section its distribution periods shall be taken to be successive periods of 12 months the first of which began with the day on which the scheme took effect; and

(b) if the scheme makes provision for distribution periods of more than 12 months, then for the purposes of this section each of those periods shall be taken to be divided into two (or more) distribution periods, the second succeeding the first after 12 months (and so on for any further periods).

(6A) In this section “umbrella scheme” has the same meaning as in section 468.

(7) In this section “unit trust scheme” has the same meaning as in the Financial Services Act 1986, except that the Treasury may by regulations provide that any scheme of a description specified in the regulations shall be treated as not being a unit trust scheme for the purposes of this section.

(8) Regulations under this section may contain such supplementary and transitional provisions as appear to the Treasury to be necessary or expedient.

(9) Sections 686 and 687 shall not apply to a scheme to which this section applies.

(10) Section 720(5) shall not apply in relation to profits or gains treated as received by the trustees of a scheme to which this section applies if or to the extent that those profits or gains represent accruals of interest (within the meaning of Chapter II of Part XVII) which are treated as income in the accounts of the scheme.

(11) This section shall have effect in relation to distribution periods beginning on or after 6th April 1987.

469

(1) This section applies to—

(a) any unit trust scheme that is not an authorised unit trust; and

(b) any authorised unit trust to which, by virtue of subsection (5) of section 468, that section does not apply,

except where the trustees of the scheme are not resident in the United Kingdom.

(2) Income arising to the trustees of the scheme shall be regarded for the purposes of the Tax Acts as income of the trustees (and not as income of the unit holders); and the trustees (and not the unit holders) shall be regarded as the persons to or on whom allowances or charges are to be made under the provisions of those Acts relating to relief for capital expenditure.

(3) For the purposes of the Tax Acts the unit holders shall be treated as receiving annual payments (made by the trustees under deduction of tax) in proportion to their rights.

(4) The total amount of those annual payments in respect of any distribution period shall be the amount which, after deducting income tax at the basic rate in force for the year of assessment in which the payments are treated as made, is equal to the aggregate amount shown in the accounts of the scheme as income available for payment to unit holders or for investment.

(5) The date on which the annual payments are treated as made shall be the date or latest date provided by the terms of the scheme for any distribution in respect of the distribution period in question, except that, if—

(a) the date so provided is more than 12 months after the end of the period; or

(b) no date is so provided,

the date on which the payments are treated as made shall be the last day of the period.

(5A) Subsection (5B) below applies where for any year of assessment—

(a) the trustees are (or, apart from this subsection, would be) chargeable under section 350 with tax on payments treated as made by them under subsection (3) above, and

(b) there is an uncredited surplus in the case of the scheme.

(5B) Where this subsection applies, the amount on which the trustees would otherwise be so chargeable shall be reduced—

(a) if the surplus is greater than that amount, to nil, or

(b) if it is not, by an amount equal to the surplus.

(5C) For the purposes of subsections (5A) and (5B) above whether there is an uncredited surplus for a year of assessment in the case of a scheme (and, if so, its amount) shall be ascertained by—

(a) determining, for each earlier year of assessment in which the income on which the trustees were chargeable to tax by virtue of subsection (2) above exceeded the amount treated by subsection (3) above as annual payments received by the unit holders, the amount of the excess,

(b) aggregating the amounts determined in the case of the scheme under paragraph (a) above, and

(c) deducting from that aggregate the total of any reductions made in the case of the scheme under subsection (5B) above for earlier years of assessment.

(5D) The references in subsection (5C)(a) above to subsections (2) and (3) above include references to subsections (2) and (3) of section 354A of the 1970 Act.

(6) In this section “distribution period” has the same meaning as in section 468, but—

(a) if the scheme does not make provision for distribution periods, then for the purposes of this section its distribution periods shall be taken to be successive periods of 12 months the first of which began with the day on which the scheme took effect; and

(b) if the scheme makes provision for distribution periods of more than 12 months, then for the purposes of this section each of those periods shall be taken to be divided into two (or more) distribution periods, the second succeeding the first after 12 months (and so on for any further periods).

(7) In this section “unit trust scheme” has the same meaning as in the Financial Services Act 1986, except that the Treasury may by regulations provide that any scheme of a description specified in the regulations shall be treated as not being a unit trust scheme for the purposes of this section.

(8) Regulations under this section may contain such supplementary and transitional provisions as appear to the Treasury to be necessary or expedient.

(9) Sections 686 and 687 shall not apply to a scheme to which this section applies.

(10) Section 720(5) shall not apply in relation to profits or gains treated as received by the trustees of a scheme to which this section applies if or to the extent that those profits or gains represent accruals of interest (within the meaning of Chapter II of Part XVII) which are treated as income in the accounts of the scheme.

(11) This section shall have effect in relation to distribution periods beginning on or after 6th April 1987.

Miscellaneous charges (list for the purposes of certain provisions that formerly referred to Case VI of Schedule D)

Commencement.

Reduction in chargeable profits following an exempt period

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Territorial sea and designated areas.

Interpretation of the Corporation Tax Acts etc.

Miscellaneous charges (list for the purposes of certain provisions that formerly referred to Case VI of Schedule D)

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Qualifying trade, profession or vocation

How averaging claim is given effect

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Loan to buy machinery or plant.

Substitution of security: supplemental.

Relevant loan interest.

Home improvement loans.

Exceptions from section 419.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

CHAPTER 1B — PROVISIONS AS TO CAPITAL SUMS PAID TO SETTLOR

CHAPTER 1C — LIABILITY OF TRUSTEES

About this Schedule

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Insurance companies: allocation of expenses etc in computations under Case I of Schedule D.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Introduction

Adjustment of profits on averaging claim

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

The approved amount: passenger payments

Introduction

Part IV — Disallowed debits and non-trading deficits

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Qualifying vehicles

Employment

The approved amount: mileage allowance payments

Form of relief.

Interest ceasing to be relevant loan interest, etc.

Relevant loan interest.

Certain quoted companies not to be close companies.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Manufactured dividends and interest.

Section 751A: supplementary

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Employment

Withdrawal of right to tax credit of certain non-resident companies connected with unitary states.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Interest on payments in respect of corporation tax and meaning of “the material date".

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Interest on tax overpaid.

Transfers of rights to receive distributions in respect of shares

Offshore income gains: application of transfer of assets abroad provisions

Qualifying trade, profession or vocation

How averaging claim is given effect

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

The approved amount: mileage allowance payments

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Certain quoted companies not to be close companies.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

The pool of qualifying E&A losses and the pool of non-qualifying losses

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Meaning of “UK property business” and “overseas property business”

Miscellaneous charges (list for the purposes of certain provisions that formerly referred to Case VI of Schedule D)

Interest on tax overpaid.

Section 751A: supplementary

Introduction

Adjustment of profits on averaging claim

Tax year

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Manufactured interest on UK securities: general

Manufactured interest on gilt-edged securities etc.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Home improvement loans.

Election that assets not be foreign business assets

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Amount of post-commencement supplement for a post-commencement period

Section 796: trade income

Mutual agreement procedure and presentation of cases under arrangements.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Utilisation of eligible unrelieved foreign tax.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Commencement.

Interpretation of the Corporation Tax Acts etc.

Meaning of “UK property business” and “overseas property business”

Income treated as arising under section 761(1): remittance basis

Change in company ownership: postponed corporation tax.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Sales etc. at an undervalue or overvalue.

Section 785B: expectation that relevant capital payment will not be paid

Company vehicles

Introduction

The approved amount: mileage allowance payments

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

About this Schedule

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

The non-qualifying pool

Repayment supplements: companies.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Change in ownership of company with unused non-trading loss on intangible fixed assets

Sales etc. at an undervalue or overvalue.

Restriction of relief for payments of interest.

Tax year

Company vehicles

Employment

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

About this Schedule

Interest ceasing to be relevant loan interest, etc.

Home improvement loans.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Employment

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Territorial sea and designated areas.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Interpretation of Income Tax Acts.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Exemption from sections 739 and 740 (transactions before 5th December 2005)

Introduction

Introductory

Payments and other benefits to which section 148 applies

Payments and other benefits excluded from charge under section 148

Application of £30,000 threshold

Exclusion or reduction of charge in case of foreign service

Valuation of benefits

Notional interest treated as paid if amount charged in respect of beneficial loan

Giving effect to the charge to tax

Reporting requirements

Interpretation

Qualifying vehicles

The approved amount: passenger payments

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Qualifying companies

Supplement in respect of a post-commencement period

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Adjustment of profits on averaging claim

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

About this Schedule

The pool of qualifying E&A losses and the pool of non-qualifying losses

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Liability of non-transferors.

Exemption from sections 739 and 740 (transactions before 5th December 2005)

Company vehicles

Introduction

Supplement in respect of a pre-commencement accounting period

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Power to modify sections 727A, 730A, 730BB and 737A to 737C

Qualifying trade, profession or vocation

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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Income and Corporation Taxes Act 1988

Application of sections 251B and 251C

Securities.

Application of this Chapter etc. to policies and contracts in which persons other than companies are interested

Regulations in relation to qualifying policies

Cessation of approval: general provisions.

Social security benefits and contributions.

Exemption from tax in respect of qualifying premiums.

Effect of appointment or arrangements under section 659B.

Election as to tax exempt business.

Revocable settlements allowing reversion of property.

Settlements made before 7th April 1965 but after 9th April 1946.

Special rule for computing chargeable profits.

Deductions: asset transferred within group.

Contemplative religious communities: gains exempt from corporation tax

Reduced loss relief for additions to non-profit funds

Regulations in relation to qualifying policies

Reduction of United Kingdom taxes by amount of credit due.

Recovery of tax credits incorrectly paid.

VAT penalties etc.

VAT penalties etc.

Interest on payments in respect of corporation tax and meaning of “the material date".

VAT penalties etc.

Territorial sea . . . .

Interpretation of the Corporation Tax Acts etc.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Qualifying trade, profession or vocation

Qualifying trade, profession or vocation

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Assessment, recovery and postponement of supplementary charge

Introduction

Certified unit trusts: distributions.

Power to inspect documents.

Relief for individuals.

Introduction

Company vehicles

Introduction

Tax year

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Revocable settlements allowing release of obligation.

Charge on profits.

The property managing subsidiaries requirement

Payments to unmarried minor children of settlor.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Introduction

Returns where it is not established whether acceptable distribution policy applies.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Change in ownership of company with investment business: deductions generally

Change in ownership of company carrying on property business.

Provision not at arm’s length.

Sections 774B and 774D: power to provide further exceptions

Sale by individual of income derived from his personal activities.

Assets leased to traders and others.

Assets leased to traders and others.

The approved amount: mileage allowance payments

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Employment

Section 785B: expectation that relevant capital payment will not be paid

Restriction of relief for payments of interest.

Limits on credit: minimisation of the foreign tax.

Reduction of United Kingdom taxes by amount of credit due.

Recovery of tax credits incorrectly paid.

Recovery of tax credits incorrectly paid.

Arrangements to avoid section 812.

Disposals and acquisitions of company loan relationships with or without interest.

Insurance companies: allocation of expenses etc in computations under Case I of Schedule D.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Amount of post-commencement supplement for a post-commencement period

Amount of post-commencement supplement for a post-commencement period

The approved amount: mileage allowance payments

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

The approved amount: passenger payments

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Provision not at arm’s length.